How to Obtain an EIN in Texas | A Comprehensive Guide

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Obtain an EIN in Texas

In starting an LLC in Texas, it is crucial to understand the importance of an Employer Identification Number (EIN) and how it impacts your business operations. An EIN is a unique nine-digit number the Internal Revenue Service (IRS) assigns to businesses operating in the United States for identification purposes. This number is essential for running a business, such as filing taxes, opening bank accounts, and hiring employees.

This article will explore the complete guide to obtaining an EIN in Texas and the responsibilities and requirements associated with having an EIN.

Webinarcare Editorial Team will help you understand the process of obtaining an EIN. You must be guided by all the factors gathered in this article.

How to Obtain an EIN in Texas

EIN Definition and Purpose

To form an LLC, an EIN is necessary for your business. An Employer Identification Number (EIN) is a federal tax identification number used by the Internal Revenue Service (IRS) to identify businesses in the United States. It is similar to a Social Security Number (SSN) for individuals but is specifically designed for businesses. The main purpose of an EIN is to help the IRS track and administer taxes for companies.

In Texas, businesses are required to have an EIN if they meet any of the following criteria:

  • Have employees
  • Operate as a Partnership or Corporation in Texas
  • File tax returns for employment, excise, or Alcohol, Tobacco, and Firearms (ATF) taxes
  • Withhold taxes on income, other than wages, paid to a non-resident alien
  • Have a Keogh plan (a tax-deferred pension plan for self-employed individuals or unincorporated businesses)
  • Are involved with trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers’ cooperatives, or plan administrators

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How to Obtain an EIN in Texas

Obtaining an EIN in Texas is a straightforward process; several methods are available to apply for one. However, if you want to be at ease with the process you can hire an LLC Services in Texas, with add-ons of obtaining an EIN.

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Online Application Process

The easiest and fastest way to obtain an EIN is by applying online through the IRS website. The online application is available for businesses in Texas and the rest of the United States.

irs

To apply for an EIN online, follow these steps:

  1. Visit the IRS EIN Assistant webpage.
  2. Click “Apply Online Now” and follow the prompts to complete the application.
  3. Provide the necessary information, such as your legal name, trade name (if applicable), business address, and the responsible party’s Social Security Number or Individual Taxpayer Identification Number.
  4. Select the appropriate legal structure for your business (e.g., sole proprietorship, general partnership, corporation, etc.).
  5. Provide additional information as required, such as the number of employees, the reason for applying, and the primary business activity.
  6. Review and submit your application.

Upon successful completion of the application, you will receive your EIN immediately. Save or print a copy of the confirmation notice for your records.

Other Application Methods

If you prefer not to apply online or are unable to access the online application, you can also obtain an EIN through the following methods:

  • Fax: Complete Form SS-4 (Application for Employer Identification Number) and fax it to the appropriate fax number listed on the IRS website. You should receive your EIN within four business days.
  • Mail: Complete Form SS-4 and mail it to the appropriate address on the IRS website. The processing time for mailed applications is approximately four weeks.
  • Telephone: International applicants can apply for an EIN by calling the IRS at 267-941-1099 (not a toll-free number) from 6:00 a.m. to 11:00 p.m. Eastern Time, Monday through Friday.

After you have your EIN number, you can benefit in several ways. It will give your Texas LLC the final advantage necessary to operate fully without legal or judicial issues.

If you have a Registered Agent, he can file an EIN for your business. Also, if you are planning to file for an LLC in Texas, your Registered Agent should file for the Certificate of Formation in Texas.

Uses of EIN in Texas

An EIN must run a business in Texas. Some of the primary uses for an EIN include:

Opening a Business Bank Account

Banks typically require an EIN to open a business bank account, which is essential for separating your personal and business finances. With a business bank account, you can accept payments, deposit funds, and manage your company’s finances more efficiently.

If you are planning a bank for your Texas business, you can check out the Best Banks in Texas, which offer the best combination of fees, services, and convenience for your business needs.

Filing State and Federal Taxes

Businesses in Texas must file taxes with both the state and federal governments, and an EIN is necessary to report and pay these taxes. Your EIN is used on various tax forms, such as income tax returns, employment tax returns, and excise tax returns which you can pay in Texas Comptroller of Public Accounts.

Payroll and Employee Tax Reporting

If your business has employees, you will need an EIN to report wages and other compensation paid to your workers. Additionally, an EIN is required for withholding and remitting federal income and payroll taxes on your employees’ behalf.

If you hire an employee for your business, you must request that your employees complete the following forms:

  • Employment Eligibility Form
  • Federal Tax Withholding Form
  • W-4 Form
  • Workers Compensation Claim Form
  • Disability Self-Identification Form
  • U.S. Citizenship and Immigration Services Form

Applying for Business Licenses and Permits

An EIN is often required when applying for business licenses and permits in Texas. These licenses and permits may be necessary for various aspects of your business operations, such as zoning approval, health permits, or sales tax registration.

In Texas, business license fee costs around the range of $50 – $300. You can check out Texas Business Licenses to learn more about licenses and permits.

Establishing Credit and Securing Loans

An EIN can help your business establish credit, as it serves as an identifier for your company in the eyes of financial institutions. Additionally, lenders may require an EIN when applying for business loans or lines of credit.

Responsibilities and Requirements for EIN Holders in Texas

As an EIN holder in Texas, you are responsible for several tasks related to maintaining and managing your EIN. Some of these responsibilities and requirements include:

Updating the IRS on Changes to Business Information

If your business undergoes significant changes, such as a change in address, legal structure, or a responsible party, you must inform the IRS by filing the appropriate forms. This ensures the IRS has accurate and up-to-date information about your business and can properly administer taxes.

update my information

You can go to the Update My Information website of the Internal Revenue Service.

Required Tax Filings and Payments

With an EIN, your business is responsible for filing various tax returns and making tax payments to federal and state governments. Be informed about the specific tax obligations for your business type and industry in Texas.

To keep your business in good standing in Texas, you must file an Annual Report with the Texas Secretary of State. The annual report provides updated information about your LLC, such as changes in address, members, or Registered Agent.

Record-Keeping Requirements

Proper record-keeping is essential for businesses with an EIN, as it helps ensure accurate tax reporting and compliance with laws and regulations. Maintain records of your company’s income, expenses, and other financial transactions to facilitate accurate tax filing and minimize potential issues with the IRS.

Establish a reliable accounting system to track income, expenses, and tax obligations. You can manage your finances using spreadsheets, accounting software, or hiring a professional accountant.

Closing an EIN Account

Suppose your business ceases operations or no longer requires an EIN. In that case, you must notify the IRS by submitting a letter containing your complete legal name, EIN, business address, and the reason for closing the account. This allows the IRS to update its records and prevent future tax-related issues.

cancel EIN

If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, include that when you write it to the IRS with the below mailing address:

  • Internal Revenue Service MS 6055 Kansas City, MO 64108
  • Internal Revenue Service MS 6273 Ogden, UT 84201

Or, you can check out Canceling an EIN via the IRS for further information.

Common Issues and Solutions for EIN in Texas

Business owners in Texas may encounter issues related to their EIN, such as losing or misplacing the number, incorrect information on the EIN application, or changes in business structure or ownership. Here are some solutions to common EIN-related problems:

  • Lost or Misplaced EIN: If you lose or misplace your EIN, you can contact the IRS by calling their Business & Specialty Tax Line at 1-800-829-4933. The IRS representative can provide you with your EIN after verifying your identity.
  • Incorrect Information on EIN Application: Suppose you discover an error on your EIN application, such as an incorrect business name or address. In that case, you can correct the information by submitting a letter to the IRS detailing the changes. Be sure to include your EIN, the incorrect information, and the correct information in your letter.
  • Change in Business Structure or Ownership: If your business undergoes a significant legal structure or ownership change, you may need to obtain a new EIN. Consult the IRS guidelines to determine if a new EIN is necessary.
  • Dealing with Identity Theft or Fraud: If you suspect your EIN has been compromised or used fraudulently, immediately report the issue to the IRS. The IRS can guide you through the steps to secure your EIN and protect your business from potential tax-related issues.

State-Specific EIN Information and Resources

To further assist businesses in Texas, here are some state-specific resources and information related to EINs and taxation:

  • State Tax Agency Information: The Texas state tax agency can provide information on state tax requirements, forms, and filing deadlines. Be sure to familiarize yourself with the state tax obligations for your business type and industry.
  • Business Registration Requirements: In addition to obtaining an EIN, businesses in Texas must also register with the appropriate state agencies. This may include registering your business name, obtaining necessary licenses and permits, and registering for state taxes.
  • Employer Tax Obligations and Filings: Employers in Texas must comply with various state tax obligations, such as withholding state income tax from employee wages and reporting these withholdings to Texas Comptroller of Public Accounts. Research your business’s specific employer tax requirements in Texas.
  • Local Resources and Assistance for Businesses in Texas: Many local organizations and government agencies in Texas offer resources and assistance for small business owners. These resources may include business counseling, training, and financial assistance programs.

Do I Need to Apply for an EIN If I Also Have Business In Other States?

Yes, if you are operating a business with employees, have a corporation or partnership, or are required to file employment, excise, or alcohol, tobacco, and firearms tax returns, you will need an EIN (Employer Identification Number). If your business operates in multiple states, you only need one EIN for federal tax purposes. However, you may need to register for state-specific tax identification numbers in each state where you conduct business. Check with the Texas Comptroller of Public Accounts to determine their requirements.

FAQs

What is an EIN?
An EIN is an Employer Identification Number, sometimes called a federal tax ID number, used to identify a business entity.
Who needs an EIN in Texas?
Sole proprietors, partnerships, LLCs, corporations, non-profit organizations, trusts, and estates, which have employees or meet other IRS tax requirements.
How can I apply for an EIN in Texas?
You can apply for an EIN in Texas online, by mail, fax, or telephone.
Is it free to get an EIN in TX?
Yes, it’s free to apply for an EIN in Texas.
How long does it take to get an EIN in TX?
It typically takes about 5 – 10 business days to process your EIN application in TX, but you can get one instantly online when applying with the IRS.
What information do I need to apply for an EIN in Texas?
You’ll need basic identifying information about your business, such as its name, address, phone number, and more personal details, such as your social security number, for verification purposes.
Who issues EIN numbers in Texas?
The IRS assigns EIN numbers to businesses all over the US, including Texas.
Is an EIN the same as a sales tax permit in Texas?
No. An EIN only identifies the business entity to the IRS, while a sales tax permit authorizes the business to collect and remit sales tax to the state.
Do I need to get an EIN in TX if I run a single-member LLC and have no employees?
No, it is not required, but many people still apply for an EIN for various other business needs, like opening a business bank account.
Can someone else apply for an EIN for my Texas business?
Yes, but you will still need to provide information to the person or firm to ensure accuracy.
What is the number to call for EINs in Texas?
You can call the IRS’s toll-free number at 1-800-829-4933 to apply by telephone.
Is there a way to check the status of my EIN application in Texas?
Yes, you can check status online via the IRS’ electronic systems.
Can I use one EIN number for different sources of income in Texas?
Yes, the same EIN number can be used for different entities owned by the same individual or organization.
Do I need to register my EIN with the TX Secretary of State?
No, you do not have to register your EIN with the Secretary of State’s Office.
What happens if I misplace my EIN in Texas?
You can request a new EIN by contacting the IRS.
How do I cancel or terminate my EIN in Texas?
If you no longer need your EIN, you can write a letter to the IRS requesting taxation termination.
Can someone steal my EIN in Texas?
Yes, just like with other identifying information, your EIN can be stolen online or offline.
Can I apply for more than one EIN in Texas?
Yes, you can apply for as many EINs as necessary for different entities.
Do foreign businesses need an EIN in Texas?
Foreign businesses that engage directly in a trade or business in the United States need an EIN.
Can my EIN be suspended or taken away in Texas?
Yes, businesses that fail to file their taxes or commit fraudulent acts are at risk of losing their EIN.
What’s the easiest way to get an EIN in Texas?
Apply for it online via the IRS web site.
When should I first apply for an EIN in Texas?
As long as you meet the IRS requirements for having an EIN, you can apply anytime before, during, or after starting your business in Texas.
Can I make changes to my EIN once I have it in Texas?
Yes, but there are certain types of changes that you may not need to file as it may trigger the need for a new EIN.
What should I do if my EIN is stolen in Texas?
You should report the theft to the IRS and local law enforcement officials promptly.
How do I change the responsible party shown on my EIN Application Form in Texas?
You don’t, if you have already been assigned an EIN. Instead, build a solid relationship with everyone who inhabits each role in your business.
If I am non-profit organization, do I still need an EIN in Texas?
Yes, religious, charitable, or nonprofit organizations are still required to have an EIN.
Can a non-US citizen or resident get an EIN in Texas?
Yes. Having multiple citizenships or lack of citizenship does not disqualify a foreign national or resident from obtaining an EIN.
Why might I be rejected when applying for an EIN?
Factors such as submitting incorrect information, an undocumented status, and business inaccuracies can all trigger IRS revisions or denials.
Do I need an EIN to file my federal and state taxes in Texas?
No, you can file but it’s more organized if you already have an EIN.
Why do I need an EIN in Texas?
You need an EIN in Texas if you’re starting a business, hiring employees, or opening a bank account.
How do I apply for an EIN in Texas?
You can apply for an EIN in Texas online, by mail, by fax, or by phone.
Is there a fee to apply for an EIN in Texas?
No, there’s no fee to apply for an EIN in Texas.
Can I apply for an EIN for my Texas business online?
Yes, you can apply for an EIN for your Texas business online through the IRS website.
Can I apply for an EIN for my Texas business by mail?
Yes, you can apply for an EIN for your Texas business by mail using Form SS-4.
Can I apply for an EIN for my Texas business by fax?
Yes, you can apply for an EIN for your Texas business by fax using Form SS-4.
Can I apply for an EIN for my Texas business by phone?
Yes, you can apply for an EIN for your Texas business by phone by calling the IRS Business & Specialty Tax Line at 1-800-829-4933.
How long does it take to get an EIN in Texas?
You can get an EIN for your Texas business immediately online, or within four business days by mail, fax, or phone.
Can I use the same EIN for multiple Texas businesses?
No, each Texas business must have its own unique EIN.
Can I use my personal Social Security number instead of an EIN for my Texas business?
You can use your personal Social Security number instead of an EIN for your Texas business if you’re a sole proprietor, but it’s generally not recommended for liability reasons.
Do I need an EIN for my Texas nonprofit organization?
Yes, you need an EIN for your Texas nonprofit organization if you have employees or if your organization is subject to certain taxes.
Can I apply for an EIN for my Texas trust or estate?
Yes, you can apply for an EIN for your Texas trust or estate using Form SS-4.
Can I get an EIN for my Texas business if I don’t have a physical address?
Yes, you can use a mailing address instead of a physical address when applying for an EIN for your Texas business.
Do I have to provide a Texas street address when applying for an EIN?
No, you can use a PO Box or a foreign address instead of a Texas street address when applying for an EIN.
Can I apply for an EIN for my Texas business if I don’t have a Social Security number?
Yes, you can apply for an EIN for your Texas business using your individual taxpayer identification number (ITIN) instead of a Social Security number.
Can I change the address on my Texas EIN?
Yes, you can change the address on your Texas EIN by filing Form 8822-B, Change of Address or Responsible Party.
How long is my Texas EIN valid for?
Your Texas EIN is valid for as long as your business is in operation, and you don’t need to renew it.
Do I have to file taxes in Texas if I have an EIN?
Yes, you still need to file taxes in Texas and with the IRS if you have an EIN.
Can I cancel my Texas EIN if I close my business?
Yes, you can cancel your Texas EIN by writing to the IRS at the address where you originally applied for it.
Can I reactivate my Texas EIN if I start a new business later on?
Yes, you can reactivate your Texas EIN if you start a new business later on, as long as you’re using the same EIN.
What if I forget my Texas EIN?
You can call the IRS Business & Specialty Tax Line at 1-800-829-4933 to retrieve your Texas EIN.
Can I apply for an EIN for my Texas business if it’s still in the planning stages?
Yes, you can apply for an EIN for your Texas business even if it hasn’t started operating yet.
Can I apply for an EIN for my Texas business if it doesn’t have a name yet?
Yes, you can apply for an EIN for your Texas business using your personal name as the “doing business as” (DBA) name.
Can I apply for an EIN for my Texas business if I’m not a US citizen or permanent resident?
Yes, you can apply for an EIN for your Texas business if you’re not a US citizen or permanent resident, as long as you have a valid taxpayer identification number.
Can I get help applying for an EIN for my Texas business?
Yes, you can get help applying for an EIN for your Texas business from the IRS, a tax professional, or a business formation service.
What should I do if the IRS rejects my EIN application for my Texas business?
If the IRS rejects your EIN application for your Texas business, they will send you a letter explaining why it was rejected and what you need to do next.
Can I apply for an EIN for my Texas business if I owe back taxes?
Yes, you can still apply for an EIN for your Texas business if you owe back taxes, but you should try to resolve your tax issues as soon as possible.
How do I update the information on my Texas EIN?
You can update the information on your Texas EIN by filing Form 8822-B, Change of Address or Responsible Party, or by contacting the IRS Business & Specialty Tax Line.

Also Read

How to Save Money While Getting Ein for Texas LLC

One of the first steps to saving money when getting an LLC for your Texas business is to do your research. Instead of hiring an expensive attorney or formation service right away, take the time to educate yourself on the process of forming an LLC. There are plenty of online resources available that can guide you through the steps of forming an LLC, saving you money on legal fees. By investing some time and effort upfront, you can save yourself hundreds of dollars in unnecessary expenses.

Another way to save money when getting an LLC for your Texas business is to take advantage of discounts and promotions. Many formation services offer discounts or coupon codes that can significantly reduce the cost of forming your LLC. Look for discounts on popular formation services like LegalZoom or IncFile, and be sure to compare prices to find the best deal. Additionally, keep an eye out for promotions from your state government that may offer fee waivers or discounts for LLC formation.

Choosing the right business structure for your Texas LLC can also help you save money in the long run. While an LLC offers many benefits, including limited liability protection and pass-through taxation, it may not be the best option for every business. Consider whether another business structure, such as a sole proprietorship or partnership, may better suit your needs. By structuring your business in a way that minimizes taxes and fees, you can save money and maximize your profits.

When it comes to ongoing expenses for your Texas LLC, there are also ways to save money. Be sure to shop around for the best deals on business services, such as accounting or legal services. Consider hiring freelancers or contractors instead of full-time employees to save on payroll costs. You can also save money by negotiating with vendors for better pricing on supplies or services.

Overall, saving money while getting an LLC for your Texas business is possible with some careful planning and research. By educating yourself on the formation process, taking advantage of discounts and promotions, choosing the right business structure, and minimizing ongoing expenses, you can save money and ensure that your business is set up for long-term success.

Conclusion

Understanding the importance and uses of an EIN in Texas is crucial for the successful operation of your business. By obtaining and maintaining your EIN, you can ensure compliance with federal and state tax laws, establish a strong financial foundation for your company, and access various resources and opportunities for growth. Be sure to utilize the available resources and support for businesses in Texas to maximize your chances of success.

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