Six things we find in almost every set of HVAC books we open

None of these mean anyone did anything wrong. They mean the bookkeeping was set up for a generic small business rather than a contractor who sells labor, parts, equipment and service plans out of the same truck.

01

Service agreements booked the day the card clears

A year of maintenance collected in March should not automatically be treated as March revenue. Tracking it separately can give you a much more accurate picture of monthly margins and may affect the proper accounting and tax treatment.

02

No idea which truck makes money

You can price a changeout in your sleep. Ask what a Tuesday service call actually costs once you load the tech, the truck, the parts on it and the drive time, and most owners are guessing. That's a chart of accounts problem, not a you problem.

03

Techs on a 1099 who are not subcontractors

If he drives your truck, wears your shirt and takes the calls you dispatch, a 1099 is a bet you will lose if anyone looks. The exposure is back withholding plus penalties, and it compounds quietly for years.

04

Three jurisdictions; three sets of tax rules

An HVAC company working throughout the DC Metro area can have filing obligations in DC, Maryland and Virginia. Income taxes, entity-level taxes, payroll, unemployment and licensing each have their own rules — and where your crews actually perform the work can matter just as much as where the business is located.

05

Section 179 taken, consequences not explained

Writing the truck off in year one feels great. Nobody mentions what happens to the gain when you trade it, or what a zero-basis fleet does to the year you finally sell the business. Worth deciding on purpose.

06

Parts and labor taxed the same way everywhere

They are not taxed the same way everywhere. Whether you are the consumer of the material or the retailer of it changes across the line, and sales tax is the audit that arrives without warning.

The part nobody warns you about

One metro area doesn't mean one set of tax rules.

We work in all three jurisdictions every year, so we look at where the company is located, where the crews are working, and which taxes and registrations follow each.

District of Columbia

Performing work in DC may create a DC business tax filing obligation for the company itself. Which return applies depends on how the business is taxed.

There is also no pass-through entity workaround here, which matters if your partners are getting one in Virginia.

Maryland

The pass-through entity election is worth real money and is easy to miss, because it has to be made — it does not happen because your return was filed.

And once you're working Montgomery and Prince George's regularly, the company itself can pick up a filing obligation here.

Virginia

The PTET election is one of the better deals available to a profitable contractor and the one we most often find unclaimed on a first-year review.

Add the local BPOL tax, which is levied on gross receipts — not profit — and varies by jurisdiction.

What we actually do for a shop your size

Business and personal returns, filed together

The S corporation or partnership return and your 1040 handled as one job by one person, so nothing falls between them.

A chart of accounts built for contracting

Cost of goods split so you can see gross margin on install, on service and on agreements — separately, monthly.

Multistate payroll and registration cleanup

Registered where you need to be, filing where you should, and unwinding it where you shouldn't have been.

Entity structure and reasonable compensation

The S corporation question answered with a documented salary study rather than a number somebody guessed at.

Quarterly planning, not an April surprise

We run a projection before the year closes, while there is still something you can do about the answer.

Books a buyer would accept

If the consolidators are calling you — and they are calling everybody — what your statements look like sets your multiple.

What it costs

Flat fees, agreed before anything starts. You will not get an invoice because you called with a question — that is the whole point of working this way.

Where you land in a range depends on entity count, how many states you touch and the state of the books when we open them.

Tax and advisory relationship

Business and personal returns, quarterly planning, and the phone calls

$6,000 – $12,000 / year

Monthly bookkeeping

Reconciled and closed by the 15th, on a chart of accounts built for contracting

$750 – $1,200 / month

Job-costed bookkeeping

The above plus margin by install, service and agreement, and multistate payroll

$1,500 – $2,500 / month

A second opinion on one year

We read your last return and books and tell you what we'd change

from $500

We're probably a fit if

You run five to twenty people out of the DC metro, residential or light commercial.

You want to know the answer before December, not be told it in April.

You'd rather pay one number for the year than wonder whether calling costs you money.

We're probably not if

You're a one-truck operation — you need a good bookkeeper and a straightforward return, and we'd be more than that.

You're shopping purely on price. We are not the cheapest and we're not going to pretend otherwise.

You want someone to sign a return without asking questions about it.

See what I'd find in your business

Take the 2-minute HVAC Tax Checkup

See what may be worth addressing before December.

Answer a few questions about your business and you'll get back the areas that may deserve a closer look before year-end. Results straight away — no name, no email, nothing to unsubscribe from later.

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Or call 703-214-1980