‘Tis the season for holiday cheer—and smart business moves! If you’re planning a holiday party, why not make Uncle Sam help foot the bill? With some savvy tax planning, your gathering can be a memorable event for clients and colleagues while keeping your wallet intact. Let me walk you through the playbook for throwing a party that’s as joyful for your guests as it is friendly to your bottom line.

Step 1: Rent Your Home to Your Business and Pocket Tax-Free Cash (The Augusta Rule Magic)

Here’s the deal: the Augusta Rule (aka Section 280A(g)(2)) lets you rent your personal home to your business for up to 14 days a year without paying a dime in taxes on that rental income. Boom. This means your business can cut you a check for fair market rent, deduct it as a business expense, and you get the money tax-free. Win-win!

How it works:

• Find out what your home would rent for on the market. Hint: Check Airbnb, local listings, or ask a realtor buddy.

• Rent your home to your business for the day of the party. Your business pays you, you report nothing, and the deduction goes straight on the business books.

Example: If your home rents for $1,500 a day, your business gets a $1,500 deduction, and you get $1,500 tax-free. You just turned your living room into a profit center. You’re welcome.

Pro-tip: If you want the nitty gritty on how to really maximize this tax strategy, check out our workshop on Summit Strategy Sessions or join our Navigators Group for free access.

Step 2: Invite Your Clients and Future Clients—It’s a Party and a Marketing Goldmine

Think of your holiday party as a networking opportunity wrapped in a bow. The guest list should include:

• Current clients you love (because who doesn’t love showing appreciation?).

• Prospective clients you want to win over.

• Business partners or referral sources who help you grow.

Tax Hack: Keep it business-focused. Save those RSVPs, take photos of your decked-out party space, and document the event as a legit business development activity. Bonus? All those email addresses from RSVPs can go straight into your marketing list for follow-ups in the new year.

Why this matters:

• You’re not just throwing a party—you’re hosting a business development extravaganza. Everyone wins when you mix mingling with marketing.

Step 3: Gifts That Are Personal, Not Pricey (and Perfectly Deductible)

Now let’s talk gifts—because no party is complete without a little swag. Here’s the deal:

• You can deduct up to $25 per recipient for business gifts.

• Personalization costs, like engraving, don’t count toward that $25 limit. So, get creative with thoughtful, branded items that scream “You’re important to me” without breaking the bank.

Gift Ideas That Fit the Bill:

• A sleek pen with their name etched on it. Classy and practical.

• A branded tumbler or mug for their coffee-fueled mornings.

• Festive ornaments with a little touch of personalization—bonus points if it doubles as a brand reminder.

Pro Tip: Keep it meaningful. A $20 gift that feels personal beats a generic $25 trinket every time.

Step 4: Know What’s Deductible (Food, Labor, and Everything in Between)

Food and drinks? They’re 50% deductible if the party isn’t open to the public. (Sorry, that charcuterie board isn’t free.) But here’s the silver lining: labor costs—like your caterer, bartender, or cleanup crew—are 100% deductible.

Here’s how it breaks down:

• Food and Drinks: Spent $3,000 on catering? You can deduct $1,500.

• Catering Crew: Paid $1,500 for servers and cleanup? Deduct the full $1,500.

• Decorations and Rentals: Fully deductible as part of the party’s business purpose.

Pro Tip: Make sure you get an itemized invoice from your caterer separating food costs from labor. The IRS loves details, and you’ll love the deduction.

Step 5: Crunching the Numbers: A Holiday Party for 100 Guests

Let’s put this all together with some real numbers. You’ve got 100 guests coming, and you’re ready to host a bash they’ll never forget. Here’s the breakdown:

After-Tax Cost Calculation:

• Total Deduction: $6,500.

• Tax Savings: $6,500 × (32% federal + 5% state) = $2,405.

• Out-of-Pocket Cost: $8,000 − $2,405 = $5,595.

Not bad for a stellar event that doubles as a marketing and networking masterpiece, right?

Final Thoughts: Make the Holidays Work for Your Business

The holidays are about giving, connecting, and celebrating. With a little strategic planning, your holiday party can also give back to your business. Leverage the Augusta Rule, keep those receipts, and make this year’s bash a win for your bottom line.

So, what are you waiting for? Start planning, send out those invites, and give your accountant something to smile about come tax season.