TAX FREE MONEY IN 2024

MINISTER FINANCES

TAX-FREE MONEY IN 2024

Loophole for Tax-Free Rental Income

(your primary home, secondary home, and vacation home)

With summer upon us, (EXCEPT for the North East) which means many people are starting to think about summer vacations or getting away for a few days.

The IRS has a Section 280A, in the Tax Code which allows homeowners to rent out their home for up to 14 days per year, (the max days) and they DO NOT have to report any of the rental income to the IRS on their tax return.

This does not matter what income bracket you fall into. This is known as the Augusta Rule

 If you rent the property out for 15 days or more, all of the money becomes taxable income.

This can work both ways, you can rent out your property for 14 days and then you can tell your friend to rent out their property to you and they will not have to report the income that they receive from you.  

You may only claim this deduction on your home, if the home is your primary residence, it is not used for business (office in the home) and you do not rent the home at any other time,  more than 14 days.   

The August Rule can be applied to the owner’s secondary home, their vacation home as well as their primary home. (only,1 home or 14 total rental days per year).

Why is it called the Augusta Rule?

The Augusta rule IRS exemption was lobbied for by residents of Augusta, Georgia, in the 1970s. Each year, the Master's golf tournament is held at the Augusta National Golf Club, and residents of the city wanted to rent their homes to attendees of the tournament without becoming full-fledged rental businesses. Their efforts paid off, and Section 280A was added to the tax code. Fortunately, today, the IRS Augusta Rule extends to all homeowners in the US, not just those in Augusta, Georgia.

How Does it Work?

SECTION 280A(g) states in part:

“…if a dwelling unit is used during the taxable year by the taxpayer as a residence and such dwelling unit is rented for less than 15 days during the taxable year, then… the income derived from such use for the taxable year shall not be included in gross income…”

In layman’s terms, this means short-term rentals of personal residences are not taxable.

Of course, like with all tax laws, there is some fine print worth noting:

·         To qualify for the exemption, the taxpayer must be renting out a dwelling unit that they use as a personal residence. This means that renting out a house, apartment, condo, mobile home, boat or similar property may qualify for the exclusion as long as the taxpayer uses that dwelling unit as a residence.

·         The Augusta Rule IRS exemption applies to the owner’s primary homes, secondary homes, and vacation homes.

·         Expenses related to the rental of these properties are not deductible.

·         The 14-day restriction is cumulative and does not need to be consecutive. For example, if you live close to a popular wedding venue, you might want to rent your home to guests of different weddings throughout the summer and fall. As long as you do not exceed the 14-day rent rule in a single tax year, you can qualify.

·         The rental price must be reasonable for that location on that date. For example, if you live in Las Vegas near Raiders, Allegiant Football Stadium, your home may be rented for only $ 200 per night on an average day. However, in the days leading up to the 2024 Super Bowl, you might be able to charge $500, $700, or even $1,000 per night for the same rental due to the increased demand. As long as your rent prices are comparable to the market, it should qualify for the exemption.

Check with Local Regulations

Before you begin renting out your home, local municipalities to see if there are any restrictions or conditions for short-term renters.

Strategically Plan Your Rentals During High Market Rent Times

It’s important to use market rent for the Augusta rule. To ensure you get the most out of your 14-day rent rule, research when the rental market peaks each year in your city. If you can rent your homes during a time when rental prices are high, you can receive more tax-free income.

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Here’s an example of how it might work:

You are part owner of a small business. The business rents your vacation home for three days for the management team to use as a planning retreat. During the long weekend, management strategizes about the upcoming year. The business rents your vacation home at market rent.

The business can deduct the price of the rental as a legitimate business expense. Because you only rent your home for three days the entire tax year, you do not need to report that income on your personal income tax return.

You and the business should keep records that show the business paid market rent for the rental. You can do this by getting rental quotes from similar locations. You should also keep a record that the management team performed business duties while using the rental. They can keep meeting minutes or records that show what strategic decisions were made.

By allowing the business to take a deduction for the rental expense and allowing you to exclude that rental revenue from taxable income, the Augusta rule effectively lets small business owners “double dip” on this benefit. This means that the Augusta rule can be a great tax planning tool for both businesses and business owners.

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For QUESTIONS or COMMENTS: 

Money@rutledgefg.com

David Rutledge EA, CEP, RFC
11501 Dublin Blvd. Suite 200
Dublin, CA 94568

925-999-8295

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If someone did not treat you right, - LET IT GO

If someone has angered you, - LET IT GO

If you are holding on to some thoughts of evil and revenge, - LET IT GO

Peter asked - How long should I forgive someone who sins against me, seven times?

Jesus said - Not seven times but seventy times seven

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CHURCH SOFTWARE

CHURCH SOFTWARE

 When a church is determining what software program to use for church accounting/church management, Here are some questions to use to start your software search.

• What does the church want the software to do?

• Do you want the software do just accounting or do you want just church management, or a combination of both?

• Can the software be networked with other computers, if so how many computers do you want networked together?  (certain software will not network computers together)

• How user friendly is the software or do you need a computer tech from the software company all of the time?

• What is the software cost?  Some software comes in modules and the software modules can be later added to expand for future needs.

• Is there any telephone or online technical support?  Is there any extra cost beyond the software cost for technical help?

• Can I get a trial version of the software to look at?

 Some features of a software program a church might want to have included are:

• Accounting

• Donation/contributions tracking

• Tracking membership (possibly with pictorial directory for the staff to use)

• Visitation scheduling/tracking dates/types of visits made

• Church calendar

• Facilities scheduling (different events)

• Tracking small group members and attendance

• Tracking committee membership and attendance

• Bar code scanner to keep up with church assets

Below is a list of companies that provide church management/accounting software packages.

Logos Management Software - Logos II Church/Donor http://logoscms.com/logos2

Logos II church and donor management software serves the information needs of churches and donor organizations. Discover the efficiency of a well-designed office system to link family, individual and visitor information (Name, Address, Dates, etc.) along with a highly flexible profile (skills and roles), confidential contribution records, and groups & attendance tracking. Logos II is a current Windows system. It also provide a full featured Fund Accounting System GL, AP, AR and Payroll.

Fellowship Technologies - Fellowship One  https://www.fellowshipone.com/

Fellowship One is the first enterprise Church Management Solution (eCMS) built by a church for dynamic churches. As an ASP, it is totally scalable to meet the needs of any size church. Because it is Internet-based using a browser, it is easy to learn and use. It allows you to focus less on technology, more on ministry.

ConnectionPower - Church Ministry Software  https://churchm.ag/connection-power/

The web-based ministry solutions cause real church growth with churches experiencing visitor retention rates of 30%-55% versus an average starting point of 10%. ConnectionPower, having worked with several thousand churches of all sizes over the last 15 years, has bundled leading research, lessons learned and best practices from our extensive knowledge base into award-winning visitor retention, member care and contributions solutions that work together seamlessly to produce proven church growth. Built by pastors for pastors!

ParishSOFT - ParishSOFT Family Suite   http://help.parishsoft.com/

ParishSOFT provides a family of seamlessly integrated software modules that brings all of your ministries together, and internet integration tools that connect your parish office to your parishioners, to the diocese and to the world. Maintain complete and up-to-date census and membership information for your entire parish. Gain control of contributions, pledges, and tuition. Manage your parish school or religious education program. Communicate with individuals, staff, parish groups and your entire parish.

Helpmate Technology Solutions - Church Helpmate

Church Helpmate is the church management system that's simply powerful - AND powerfully simple! Save time & money, build unity, make better disciples, increase ministry participation, improve outreach effectiveness, and simplify your life.

Church Management Solutions - CMS  http://www.helpmate.com/

Church Management Solutions is devoted to the software needs of churches. With the licensing rights to products designed specifically for church administration, Church Management Solutions supplies unmatched software solutions. Improve communication with your congregation, save valuable time every day with fast and easy batch entry speeds entry of contributions, track detailed church attendance, and improve your church's outreach and evangelization efforts.

ACS Technologies - ACS Church Management Software   http://www.acstechnologies.com/ACS 7.0 manages every aspect of nonprofit administration including contribution records, membership tracking, financial analysis, fund accounting, and growth planning. It consists of ACS People Suite, ACS Financial Suite, and several other independent applications. ACS Technologies has been providing innovative information management solutions to churches, schools, denominations, and other faith-based organizations for over 26 years and has over 20,000 clients.

Cimarron Valley Solutions - MembershipEdge   https://www.membershipedge.com/Mebc/

MembershipEdge is an affordable, web-based subscription service. Manage individuals, families, mailings, attendance, groups and teams, contributions, pledges, schedule events, send email, photo directory and more. (No Accounting or Payroll). Work at the office, at home, where ever you have access to the web.

Wennblom Solutions - SeekerWorks  http://www.seekerworks.com/

SeekerWorks is a church-tested, pastor-approved software solution for tracking your members and attendees, assimilating visitors, supporting your volunteers, establishing church-wide and personal calendars, managing pledges and donations, generating receipts for your donors and more. Think of it as a Swiss Army knife for any church-related administrative task. SeekerWorks frees you up to do what you do best: meet the needs of your ministries and support your hardworking staff and volunteers.

 Rotunda Software - Minister Scheduler Pro   https://www.ministryschedulerpro.com/

Minister Scheduler Pro by Rotunda Software is a complete solution for managing and scheduling any number of ministers or volunteers for church services. Whether you are in charge of scheduling only one ministry for your church or scheduling all ministers and volunteers that participate in your church's services, Minister Scheduler Pro can save you hours upon hours of tedious work every month! It is by far the most sophisticated and easy to use solution available for church volunteer scheduling.

Diakonia - Faithful Steward Church Management Software http://www.church-software.com/

The innovative solution that allows churches and nonprofit organizations to manage their membership and donation records with ease. As pressures increase from the I.R.S., Revenue Canada, and other government agencies, most churches and non-profit organizations are looking for tools to meet their responsibilities, and operate more efficiently. If this describes you, Faithful Steward is the answer you've been looking for!

Daymark Software Systems - Church Partner https://www.powerchurch.com/daymark/

Church Partner is a "full featured" Church Management System that is easy to use and easy on your budget. We currently have users with as few as 25 members using the system, several with more then 5000 members, and one ministry with more than 50,000 members! Includes: Individual and Family Information, Counseling, Confidential, Visitation notes, Donations, Pledges, Committees, Schedules, Attendance, and Member Talents.

Computer Helper Publishing - Church Windows Software  https://churchwindows.com/

Church Windows is a flexible, user-friendly church management software program, offered in both "Classic" and denomination-specific versions. Choose the complete integrated package of Membership, Contributions, Financial and Payroll modules, or begin with Membership and add additional functions later.

CCIS Software - Creative Church Information System  https://www.churchsoftware.net/

CCIS Church Management Software has been providing membership, contributions, attendance, accounting & payroll management solutions since 1981 and is currently serving over 8,000 churches across the United States, UK and Africa. The membership program allows you to view members' activities, contributions and pledges without having to open a different module. AccountAbility is a true fund accounting program designed especially for churches to meet all accounting needs.

Servant PC Resources - Servant Keeper  https://www.servantpc.com/

Church Management Software that is powerful, affordable, compatible, searchable, automated, yet absolutely easy to use. It efficiently handles membership, attendance, labels, groups, graphs, contributions, pledges, and administration details; and links to Quicken/QuickBooks for complete accounting. Servant Keeper was designed with input from experts in Church ministry...our customers.

Church Management Solutions - CMS  http://www.churchmanagementsolutions.com/

Church management software that tracks membership, contributions, attendance and outreach. Includes fund accounting.

Congregation Builder - Church Management Software  http://www.congregationbuilder.com/

Full featured church management software: online directory, church calendar, room reservations, email broadcast.