Tax scholarships
How to reduce your taxes every year through tax mitigation strategy, even as a W-2 employee.
Reducing tax is not what most CPAs are for
By 2023 I was paying more in tax every year than the cost of college, and I had switched CPAs more times than I can count trying to fix it. The problem was not the accountants. A CPA's job is to file your return and keep you compliant, and most families meet theirs a month or two before the return is due, by which point the year is over and the decisions that mattered are behind them.
Which is worth saying plainly: the tax code is a book of incentives to grow the economy. It is a list of things the government wants done, and it pays people to do them. Have you ever offered your kids five dollars to clean out the car? Same idea. The difference is that the government does not make money, so it writes tax incentives instead of handing over the five dollars.
You have already seen this work. Solar panels came with a credit. Electric vehicles came with up to $7,500 under the program expanded by the 2022 Inflation Reduction Act. Nobody worried about an audit for buying a Tesla.
Now notice who actually made that reachable. The government wanted electric cars on the road, so it wrote the incentive. It did not build the cars. An entrepreneur built a company that let ordinary families collect that incentive by buying something they wanted anyway. Elon Musk did not write the tax code. He built the business that put it within reach.
That is the part most families never see, and it is what this strategy runs on. There are entrepreneurs doing exactly the same thing in corners of the code that never make the news, because they raise money from investors rather than selling to consumers. Nobody advertises them to you. Finding them, checking them and getting you into them is the work.
How a tax scholarship works
The same structure as the solar credit, in places most households never hear about.
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Find the incentive
We keep tax attorneys on retainer and spend our time on the business of tax mitigation: which incentives are live this year, which operators running them are sound, and which of them a household on a W-2 can actually reach.
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Own the asset
Equipment leasing, energy storage or portable housing. Put a fraction down on a financed purchase and the deduction is calculated on the full price, while the lease income services the loan.
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Deduct now, earn after
Bonus depreciation takes the deduction in year one. The asset then produces lease income for as long as you hold it, which is what pays tuition.
What changed in 2025
The One Big Beautiful Bill Act restored 100 percent bonus depreciation and made it permanent.
How it normally works
Spread over 5 to 39 yearsBuy equipment and you deduct the cost a slice at a time, across the schedule that asset belongs to.
With bonus depreciation
All of it in year oneBuy $500,000 of qualifying equipment and you reduce taxable income by $500,000 that year.
The standard schedules, if you want them
| Asset | Period |
|---|---|
| Computers and certain technology equipment | 5 years |
| GPUs for AI computing | 5 years |
| Office furniture and fixtures | 7 years |
| General business equipment and machinery | 5 or 7 years |
| Residential real estate | 27.5 years |
| Commercial buildings | 39 years |
Which of these programs apply to your tax position?
Book a free strategy callHow I found this, and what it has to do with college
A client asked whether I had heard of cost segregation studies and bonus depreciation. I was interested for a reason that had nothing to do with tax: my dad had been the accountant for a property company, and real estate was what let him retire.
Then I sat in on a webinar about vacation rentals. The idea was to put the tax saving and the rental income towards the next property each year, so that after about five years you owned enough to stop working.
That is where it connected. If my taxable income came down far enough in the years my kids were applying, I would also be lowering the number the financial aid formula runs on. The two problems I had been treating separately were the same problem.
Where the portable houses came from
A man in southern Utah bought a large farm, was appalled by the conditions the farm hands were living in, and went looking for affordable housing to put on the property. He found houses built overseas out of steel that fold down and ship anywhere in the world inside a shipping container. The first one he installed still has a farm worker living in it.
They spent years and several million dollars improving them. The houses ended up in the west Texas oil fields, then in RV parks, then in a list of places nobody had planned for, including temporary housing after fires and hurricanes.
Building thousands would have meant his own money or a lot of debt. Instead an investor buys the houses, takes the depreciation the same way they would on equipment, and earns lease income while the operator finds the tenants.
Who does what
What our team does
- Researches the programs every year and vets each one before it goes near a client.
- Keeps tax attorneys on retainer to check compliance.
- Handles the structure, which is normally an LLC, and the paperwork behind it.
What stays with you and your CPA
- Your CPA reviews the details and confirms you are compliant. You do not need to replace them.
- Incentives come with rules, and the rules have to be followed.
- Owning an LLC opens ordinary business deductions a W-2 household never had: home office, vehicle, kids on payroll, and the Augusta rule.
What about an audit?
This is the question I get more than any other, usually phrased as though we were doing something illegal. It is worth saying plainly that these are incentives the government wrote on purpose, and that claiming one is not the same as hiding something.
It does not work at every school either. Most schools using the CSS Profile will not accept business losses as a reduction to your aid number, which is the same reason school choice matters so much in strategy two. Where it does not reduce the cost of college, the tax saving still offsets it.
From a family who did this
Our 2025 tax strategy reduced our taxable income to zero and produced a multi six figure tax refund. I did not believe it until the money actually hit our bank account.
These are the experiences of individual Legetty clients, in their own words. Individual results depend entirely on your own income, tax position and circumstances, and nothing here is a guarantee, a projection or a typical result. Figures mentioned are what those clients say happened to them, not what this site offers or predicts.
You are either going to pay the tax, or you are going to own something that produces income instead.
Lance Morgan, founder
All four strategies
Each one helps on its own. Combined, the savings from one pay for the next.
- Tax scholarshipsTurn part of the annual tax bill into assets you own.
- Student and financial positioningLower what college costs by positioning the student and the assets.
- Scholarship housesProperty that produces deductions and cash flow, run for you.
- Leave a legacyPay for college without interrupting your own compounding.
Book a free strategy call
Tell us about your family, your income, and when the first tuition bill lands. We will walk through which of the four strategies apply to you, and what putting them in place would involve.