If your LLC has more than one member or if you are going to hire employees, you’ll need an EIN. But these aren’t the only factors. The IRS offers a test to determine if you need an EIN:
Do you have employees?
Do you operate your business as a corporation or a partnership?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco, and Firearms?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
Are you involved with any of the following types of organizations?
Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Real estate mortgage investment conduits
If you answer yes to these questions, your business needs an EIN.
Benefits of Having an EIN
There are several reasons to get an EIN, even if you’re not required to have one.
First, opening a business bank account is often required, and it adds a degree of separation between your business and personal finances. Bankers, creditors, and the IRS will identify your business by its EIN rather than your personal Social Security number.
Second, it helps establish business credit, boosting your access to financing. Third, if you end up hiring employees in the future, you’ll already have your EIN and be ready to go.
What Do I Need to Get an EIN in Texas?
According to the IRS:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the ‘responsible party,’ controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.
When you fill out the application, you’ll need the following:
Name, title, and Social Security number of managing member or owner
State in which your business is registered
Reason for applying
Main business activity
Closing month of your accounting year
Contact phone number and email
How to Apply for an EIN in Texas
The application is Form SS-4, and you can submit it via the IRS website. Alternatively, you can print the form and fax or mail it. If you apply online, your EIN will be issued immediately.
There is no cost to obtain an EIN, which never expires.
Register for Texas Taxes
You also may need to register for business taxes in Texas.
If you have employees, you don’t have to register to withhold state income tax, as Texas does not have one. You will, however, need to register for unemployment taxes with the Texas Workforce Commission.
If you sell goods or services subject to sales tax, you’ll need to register to collect and pay sales tax with the Texas Comptroller.
Your local government may also require certain tax registrations.
Even if your LLC does not need to obtain an EIN in Texas, getting one is probably the best move for your business, its finances, and its future. Just be sure to fill out the forms correctly and keep your business on the path to success.
Do I need to pay to get an EIN for my LLC in Texas?
No. Obtaining an EIN from the IRS is free of charge. Ensure you apply directly via the IRS to avoid any unnecessary fees from third-party providers.
After my application is submitted, how long will it take to receive the EIN in Texas?
Online applicants typically receive their EIN immediately after the application process. Fax applications are processed within about four business days, while mailed forms might need 4-5 weeks.
As the owner of a single-member LLC in Texas, is an EIN necessary for me?
Although some single-member LLCs can conduct certain transactions using the owner’s SSN, obtaining an EIN is generally advisable for better privacy and to meet specific business obligations.
Can non-U.S. residents without an SSN obtain an EIN for their Texas LLC?
Absolutely. Non-resident aliens or foreign entities can get an EIN for their Texas LLC. It’s not mandatory to have an SSN or ITIN, and such applicants typically use mail or fax.
Having received my EIN, what other Texas-specific duties should I be aware of?
Beyond the EIN, there could be additional state-level obligations, like registering for state taxes, securing business licenses, or adhering to other regulatory requirements in Texas.
In case of significant changes to my Texas LLC, will a new EIN be required?
Some structural or ownership changes might necessitate a new EIN. It’s beneficial to seek advice from a tax or legal professional in these circumstances.