Story · age 33 · Texas

Kevin

HVAC tech with a 4-year side business in Houston, ready to quit his W-2 and go full-time, doing the math on insurance and taxes before he files the paperwork

The situation

Kevin is 33. He has worked for a residential HVAC company in Houston for 8 years. He has held a Texas Air Conditioning and Refrigeration Contractor license (Class A) for 3 years. He started taking weekend service calls under his own name 4 years ago. The side income has grown every year. Last year it matched his W-2.

His wife Diana, who has been quietly supportive of all of it, asked him a question 6 weeks ago that he has been thinking about ever since: are you going to keep doing 2 jobs forever, or are you going to do 1 of them all the way?

What changes when this is the only income

Three things he was carrying invisibly become visible. Health insurance, which has been on his W-2 employer's plan, becomes his to source on the marketplace, through a private broker, or through a spouse's plan if available. Quarterly self-employment tax becomes the dominant tax structure rather than W-2 withholding. Workers compensation and commercial liability coverage are no longer optional in the way they were when the side income was small.

He also has to make an entity decision. Currently he is operating as a sole proprietor under his own name and SSN. Going full-time, the typical recommendation is to file an LLC at the Texas Secretary of State, possibly with a sub-S election for tax purposes once revenue justifies the additional payroll administration.

What the public record says

Texas Department of Licensing and Regulation (TDLR) administers the Air Conditioning and Refrigeration Contractor program. Class A allows work on systems of any size. Kevin holds Class A, paid in his name. Going full-time, he will need to confirm the license either continues in his individual name with the LLC named as the responsible party, or is reissued under the company name with him as the qualifying technician. TDLR publishes the rules.

The Texas Secretary of State publishes LLC formation rules and filing fees. The IRS publishes entity classification rules. The IRS Sub-S election (Form 2553) is filed within 75 days of formation if Kevin chooses that route. The CPA running his books should model after-tax cash flow under both LLC-only and LLC-with-S-election treatments before he files.

Health insurance for self-employed tradespeople is typically sourced through the federal Health Insurance Marketplace. Kevin is eligible to enroll within 60 days of losing his employer coverage (a qualifying life event). HealthCare.gov publishes the rules and the application path.

Commercial general liability and commercial auto are typically not optional once the business has employees or carries inventory in a vehicle. Workers compensation in Texas is technically not mandatory for most private employers under state law, but going without it exposes the owner to direct liability for employee injuries.

What he does on the site

Kevin opens the Business Launch Guide. Texas is in the v1 pilot, so the contractor-licensing, insurance, bonding, and LLC pages are populated for his state.

He reads the contractor-licensing page first to confirm the TDLR license-holder and qualifying-technician structure for an LLC. He reads the insurance page next. He reads the LLC vs S-corp page and starts a list of questions for the CPA he plans to interview next week.

He bookmarks the Texas Secretary of State business filings page and the IRS Form 2553 page. He runs his planned business name through the Texas SOS entity search to confirm it is available.

What is on the table

BLS OES reported a national median annual wage of $59,810 for HVAC mechanics and installers in May 2024. Top 10% above $84,250. Self-employed HVAC contractors typically earn more than the W-2 median once the business is established, but cash flow is uneven, especially in the first 18 to 24 months when accounts receivable lag and capital outlay for vehicles and tools is concentrated.

Going full-time is not a guaranteed raise. It is a different curve with different risk. Kevin has the customer base, the license, and a partner who has done the math with him. The site's role is to make every rule he needs to follow visible before he commits.

Start your own path

Open the Business Launch Guide →See HVAC trade details →

Sources cited in this story