Mortgage Killer Accelerator

Strategy 4 of 107

Business owners: rent your home to your business for up to 14 days

Depends on people or program rulesFrom new cash flow, not your paycheck

What it is

Hold real business meetings or events at your home, documented with agendas and minutes.

Steps

  1. Hold real business meetings or events at your home, documented with agendas and minutes.
  2. The business pays a fair, documented market rent. If the home is rented fewer than 15 days in the year, the rent is generally left out of your income (IRC §280A(g)); the business deducts it as an ordinary expense if it qualifies.
  3. Send the rent to principal.

Repeat: Each tax year, up to 14 days.

Measure: The year's rent sent to principal (divide by 12 for the monthly figure).

Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.

Risks

  • The IRS looks for fair rent and real business use; keep records.
  • Confirm with a CPA before you rely on it.

Who it fits

Business owners, Higher earners

Needs

Owns a business or is self-employed

How predictable

Depends on people or program rules (tenants, family, IRS records, lenders)

A worked example (hypothetical, not guaranteed)

Picture a hypothetical household (business owners). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.

They follow the steps: hold real business meetings or events at your home, documented with agendas and minutes.

Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.

The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.

Sequences that use it

  • Owner's cycle: Fourteen documented rental days a year, a corrected withholding or estimated-tax plan, and an annual recast.
  • Business owner's home stack: Meetings in the home under the 14-day rule, day bookings, the right tax payments, and a sweep line for uneven income. Keep records for every day rented.
  • Self-employed tax stack: Legal deductions for the business use of the home and family work. Keep records for every one.
  • Five-year sprint: business owner: A partial sale for the lump sum, then every legal tax saving from the home and the business sent to principal.

Sources and more information

Where to get help

Related strategies

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