An HVAC business will generally qualify for the QBI (qualified business income) deduction. Qualified Trades or Businesses (QTBs) can claim the 20% Qualified Business Income (QBI) deduction, but having the SSTB designation reduces or eliminates the 20% Qualified Business Income (QBI) deduction at higher income levels. HVAC is generally not an SSTB, which would not limit your deduction amount.
The SSTB label is irrelevant if your 2022 total taxable income (which includes non-business and business income) is $170,050 or less (or $340,100 if you're filing jointly). Above this level, the deduction will be reduced, but only if the business is considered an SSTB.
According to the IRS - An SSTB is a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading or dealing in certain assets, or any trade or business where the principal asset is the reputation or skill of one or more of its employees or owners. The principal asset of a trade or business is the reputation or skill of its employees or owners if the trade or business consists of the receipt of income from endorsing products or services, the use of an individual's image, likeness, voice, or other symbols associated with the individual's identity, or appearances at events or on radio, television, or other media formats.
Is my business an SSTB?
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