If you’re starting a business in Texas, obtaining a Tax ID, also called an Employer Identification Number (EIN), is an important step. The EIN is issued by the IRS and acts like a Social Security number for your business. It’s used for tax purposes, opening business bank accounts, hiring employees, and more. Here’s a step-by-step guide to help you get your Tax ID in Texas:
What is a Tax ID (EIN), and Who Needs One?
A Tax ID (EIN) is a unique nine-digit number assigned by the IRS for business identification purposes. You’ll need an EIN if you:
- Hire employees
- Operate as a partnership or corporation
- File employment, excise, or alcohol, tobacco, and firearms tax returns
- Withhold taxes on income (other than wages) paid to non-resident aliens
- Have a Keogh plan (a tax-deferred pension plan for self-employed individuals)
Even if it’s not legally required, obtaining an EIN offers several benefits, such as establishing a business credit profile and simplifying your tax filings.
Steps to Get a Business Tax ID in Texas
Step 1: Prepare Your Business Information
Before applying for a Tax ID, gather the following details about your business:
- Legal name of the business
- Type of business entity (e.g., sole proprietorship, partnership, corporation, LLC)
- Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the business owner(s)
- Address of the business
- Reason for applying (e.g., new business, hiring employees, etc.)
- The date when your business was started or acquired
Step 2: Register Your Business with the State of Texas
Before applying for a federal EIN, make sure your business is legally registered with the state of Texas. Depending on your business type, you may need to:
- File for a Certificate of Formation for LLCs and corporations through the Texas Secretary of State website.
- Register your Assumed Name Certificate (also known as DBA) with the county clerk if operating as a sole proprietorship or partnership.
- Obtain any required permits or licenses specific to your business or industry.
Step 3: Apply for a Federal EIN Online
The quickest and easiest way to apply for a Tax ID is through the IRS website. Here’s how:
- Go to the IRS EIN application page.
- Click the “Apply Online Now” button.
- Complete the application by entering the details collected in Step 1.
- Submit your application.
You’ll receive your EIN immediately upon the successful completion of your application—no waiting required!
Step 4: Apply by Mail or Fax (Optional)
If you prefer not to apply online, you can use IRS Form SS-4:
- By Mail: Fill out Form SS-4 and mail it to the address listed on the form. Processing can take up to four weeks.
- By Fax: Fax the completed form to the fax number provided on the form. Make sure to include your fax return number to receive
your EIN faster (usually within four business days).
Step 5: Keep Your EIN Safe
Once you receive your EIN, be sure to keep it in a safe place. You’ll need it for:
- Filing federal and state taxes
- Opening business bank accounts
- Applying for Texas state permits and licenses
- Hiring employees and running payroll
Additional Requirements for Texas Businesses
After obtaining your EIN, you may need to register with the Texas Comptroller of Public Accounts for state-level taxes. For example:
- If your business sells goods or taxable services, you’ll need to apply for a Texas Sales and Use Tax Permit.
- If you hire employees in Texas, you must register for the Texas Workforce Commission for state unemployment taxes.
You can register for these requirements via the Texas Comptroller’s office or the Texas Workforce Commission.
FAQs about Getting a Tax ID in Texas
1. Is there a cost to get an EIN?
No, the IRS issues EINs for free.
2. Can I use my EIN for multiple businesses?
No, each business entity requires its own EIN.
3. Do I need an EIN if I’m a sole proprietor?
Not always. Sole proprietors can use their Social Security Number for tax purposes unless they plan to hire employees or create a Keogh plan.
4. How long does it take to get an EIN online?
If you apply online, you’ll receive your EIN immediately upon completing your application.
5. Can a non-U.S. resident apply for an EIN?
Yes, non-U.S. residents can apply for an EIN. They’ll need to provide an Individual Taxpayer Identification Number (ITIN) during the application process.
Final Thoughts
Getting a Tax ID in Texas is a straightforward process that can unlock a world of opportunities for your business. Whether you’re hiring employees, accessing financial services, or filing taxes, an EIN simplifies these tasks and ensures you’re compliant with federal and state laws.
If you’re ready to apply for your Tax ID, the IRS EIN application portal is the best place to start. Make this important step for your business today!