Tax help for HVAC techs and contractors
You know the work. The tax side is just something nobody ever sat you down and taught. Here is what you can deduct and what to bring us.
Nothing is due today. Personal returns start at $250.
HVAC money arrives from more directions than most trades. A builder pays you on a 1099, a homeowner taps a card at the door, a distributor sends a spiff for the units you moved, and the warranty job pays weeks after you did the work. Add the parts riding around on your truck, tools you buy in every price range, and a van that is both your shop and your biggest write-off question, and the return stops being simple.
What hvac technicians can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Tools, gauges, and recovery gear
Digital manifolds, micron gauges, clamp meters, combustion analyzers, leak detectors, recovery machines, vacuum pumps, nitrogen regulators, torch kits, benders, and flaring tools are deductible when you buy them for the work.
Lower cost hand tools can come off in the year you buy them. Larger equipment such as a recovery machine or a vacuum pump may have to be capitalized and written off over time instead, and paying for it on a payment plan does not change that. There is an election with a per item dollar limit set by the IRS that decides where the line falls, so keep the receipt with the date and the price and we will pick the right treatment.
Refrigerant and truck stock
Cylinders of R-410A, R-454B, and R-32, plus contactors, capacitors, filter driers, TXVs, line sets, condensate pumps, and the duct and fittings riding in the back.
Parts you bought but have not installed are not automatically a deduction the day you swipe the card. How stock on the shelf gets treated depends on the accounting method your return uses, so tell us what is sitting on the truck at year end.
Your service van
Fuel, tires, oil changes, repairs, insurance, registration, the ladder rack, shelving, bulkhead partition, and the service body belong to the business when the van is used for the work. The van itself comes back to you through depreciation, and through the interest if you financed it or the payments if you lease it.
The principal portion of a loan payment is not a deduction by itself, so do not write off the whole note. You also take either the standard mileage rate or actual costs like gas and repairs, not both, and the choice you make the first year limits what you can do later. If the van also does personal duty, only the business share counts, and business use has to be high enough before some of the faster write-offs are available at all.
Miles between calls
Driving from one job to the next, to the supply house, to the dump, and back to the shop counts. Keep total miles for the year next to your business miles so we can apply the IRS standard mileage rate published for that year.
The drive from your house to the first call, and home from the last one, is commuting, and commuting is personal even when the van is loaded with gauges and even when it is wrapped with your logo. If your home is genuinely the base of the business, that changes, so ask before you assume it either way.
Licenses, testing, and permits
State and county license renewals, your local business tax receipt, EPA Section 608 testing and study material, NATE and factory training from the manufacturers you install, OSHA courses, continuing education hours, and the permit fees you pull on each job.
Courses that keep or sharpen the license you already hold are deductible. Schooling that gets you into the trade in the first place, or that qualifies you for a different trade, is not.
Safety gear and logo shirts
Steel toe boots, cut resistant gloves, safety glasses, hard hat, knee pads, a respirator for attic and crawlspace work, fall protection for rooftop units, and shirts with your company name on them.
Plain jeans, regular t-shirts, and ordinary boots are not deductible even if you only wear them on jobs, because they can be worn anywhere. Uniform cleaning follows the same line. It counts only if the clothing itself counted.
Lift and crane rental
Boom lifts, scissor lifts, a crane for a rooftop unit change-out, scaffolding, trailers, and the concrete tools for a new pad are deductible for the days you have them out.
When the rental comes with an operator, you are paying for a service rather than renting equipment, and that can change how the payment has to be reported at year end. Keep those invoices separate from plain equipment rentals.
Phone, tablet, and software
Dispatch and invoicing software such as ServiceTitan, Housecall Pro, Jobber, or FieldEdge, plus bookkeeping software, manufacturer diagnostic apps, the tablet in the van, and the business share of your phone bill.
One phone line that runs your life and your business is deductible only for the business share. Pick a split you can actually explain, or put a second line on the business and stop guessing.
Insurance, bonds, and workers comp
General liability, commercial auto on the van, an inland marine or tool floater policy that covers what gets stolen out of the truck overnight, workers compensation, and any surety bond your license requires.
Health insurance you pay for yourself does not sit on the same line as these. When you qualify for it, it has its own deduction on your return, it is limited by what the business earned, and unlike the others it does not reduce self employment tax.
Helpers and subcontractors
What you pay a helper, an apprentice, a duct crew, the electrician you bring in for a disconnect, or a crane operator is deductible when you can show who got paid and how much.
Get a signed Form W-9 before the first check, not in January. Unincorporated people and businesses you pay for services above the annual reporting threshold need a Form 1099-NEC, and a helper who works only for you, on your schedule, with your tools may legally be an employee rather than a sub.
Shop, storage, and home office
Rent on a shop or a storage unit for equipment and pulled units, the yard where the trailer sits, and a home office if you really run the business from a room at the house.
A home office has to be used regularly and only for the business. The kitchen table does not qualify no matter how much invoicing happens there. There is a separate and narrow rule for storing inventory or product samples at home that depends on your house being the only fixed location of the business, so ask before you count the garage.
Out of town jobs
Hotel, flights, and driving for storm work, a new construction job in another market, or factory training away from home are deductible when the trip is for the business and keeps you away overnight.
Meals on a trip like that are deductible only up to the portion the law allows for that year, and they need the date and who was there. The lunch you grab by yourself between two calls in your own town is not deductible at all, even on a fourteen hour day.
A single owner working one van files on Schedule C by default, and there is nothing wrong with staying there. The S corp conversation only earns its keep once profit is steady and clearly larger than a fair wage for your own labor, because the savings come from self employment tax on the profit above that wage and they have to cover payroll, a second business return, and a salary you can defend.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Last year's federal and state return, plus a list of any estimated tax payments you made and the dates
- Every Form 1099-NEC, 1099-MISC, and 1099-K you received, along with your own total of what you invoiced and what you actually collected
- All twelve months of statements for the bank account and cards the business runs through
- Supply house and distributor statements for the year, and invoices from any lead service, wrap shop, or advertising you paid for
- Total miles on the van for the year and your business miles, plus the purchase, loan, or lease paperwork
- Receipts for tools and equipment you bought or financed, with the date and price on each
- Any spiff, rebate, or bonus a distributor or manufacturer paid you, and whatever form came with it
- A signed Form W-9 and the year's total for every helper, sub, and crew you paid
- License renewals, EPA Section 608 documentation, permit fees, and continuing education receipts
- If you work from home, the square footage of the room and of the house, plus totals for rent or mortgage interest, insurance, power, and internet
What trips people up
Treating every deposit as income and every card swipe as an expense.
Hand us the invoice list and the bank statements together. A homeowner's payment for a full system change-out is mostly equipment cost, and a transfer between your own accounts is not income at all.
Counting the drive from home to the first call.
Log the miles in the middle of the day, which is where the real deduction lives anyway. If you truly run the business out of your house, tell us, because that is a different set of rules and it has to be set up correctly to hold.
Leaving distributor spiffs and manufacturer bonuses off the return.
Report them. Those payments are income, a form may come with them, and a mismatch between the forms and your return is exactly what generates a notice. Keep the statement that came with the check.
Paying a helper in cash with nothing written down.
Get the Form W-9 before the first check, pay by check or transfer, and keep a running total by person. Cash with no record is the hardest deduction to defend if anyone asks.
Trying to write off the customer who never paid.
If you report income when it lands in the account, you never picked that invoice up as income, so there is nothing to deduct. What you can deduct is the equipment and materials you already bought for that job, and those are probably already in your numbers.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
I get 1099s from two builders and cash from homeowners. Do I have to report the cash?+
Yes. Income is income whether or not a form shows up, and card, Zelle, and app payments leave a trail either way. Start us with your own invoice total for the year and we reconcile the forms against it, rather than the other way around.
Should I be an LLC or an S corp?+
An LLC by itself does not change your federal taxes. A single member LLC files on Schedule C unless you elect to be taxed as a corporation. The S corp question is really about payroll and self employment tax, and it only makes sense once profit is steady and big enough to carry the extra cost of running it. We can run it on your actual year instead of guessing.
How much should I be setting aside out of each job?+
Your bill is income tax plus self employment tax on your net profit, so the honest answer depends on your profit, your family situation, and your state. We can work out a percentage of every deposit for you and set up quarterly payments so April is not a surprise. We are not going to promise you a number before we have seen your year.
Can I write off the whole van this year?+
Sometimes. It depends on the vehicle, on how much of the driving is business, and on what that year's rules allow. A cargo van with shelving and no rear seats is treated differently from a pickup that also hauls the family on weekends. Bring the purchase paperwork and the mileage and we will tell you what is actually available.
My customer keeps asking about a federal credit for a high efficiency system. Do I get anything from it?+
A credit like that belongs to the homeowner and goes on their return, not yours. The federal rules for home energy credits have changed more than once and some of them have ended, so check where they stand for the year of the install before you put anything in a sales pitch. What the job gives you is revenue, taxed like the rest of your work.
I am a W-2 tech and I buy my own tools. Can I deduct them?+
Employee rules are much narrower than the rules for someone self employed, and under current federal law unreimbursed employee job expenses are not deductible on the federal return. A few states still allow something, so ask us about the state you file in. The better route is usually a tool allowance or reimbursement under an accountable plan through your employer, which is generally not taxable income to you. If you also run side work, that side work is its own business and the tools you use there are a separate conversation.
Let us take the tax part off your plate.
Tell us what you need and see your price. A real person on your team replies within one business day.