What is an Employer Identification Number (EIN)?
An EIN number Texas is an ID used by the IRS to keep tabs on your taxes and filings. Without this ID, you might find yourself facing a bit of trouble when transacting on behalf of the business.
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When Your Business Needs an EIN
Not all operations call for this ID. In fact, it is only necessary if you plan to hire people or own the business with other people, or both. However, other than being compliant with the law, this ID also helps you to:
- Open a business bank account – most institutions insist that you have this ID for you to access their services. On the plus side, having such an account makes it easier to track your money and obtain finances.
- Maintain privacy- having a separate ID enables you to reduce the usage of your personal details in transacting, thus protecting you from identity theft. You should thus get an EIN for free from the IRS.
- Hire employees – to set up a payroll, you will need to have your filing in check for the employees to file separately and report their income to the authorities.
- Professionalism – you appear more credible when operating a business ID and this enables you to further increase your protection from accrued liability.
- File and manage Federal and State Taxes – the authorities will have an easier time tracking you and this makes it harder for you to fall behind deadlines.
How To Find the EIN for your Business
You can retrieve it by locating the following:
- The notice you got when you applied online
- Bank records
- Recent tax returns
You can as well call the IRS – (800) 829-4933, to help you find a Texas EIN number.
How to Apply for a free EIN Number in Texas
Application for getting a free EIN Number Texas and can take place via:
Online
Visit the IRS website
By Mail
Access and fill form SS4 and send it to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax
Send a complete SS4 form to (855) 641-6935
Tip: You can either print the form, fill it out by hand (use a black pen), then sign; or, you can type in the form on your computer, then print and sign. When printing, use regular white paper (8.5″ x 11″).
You can download the Form SS4
Detailed instructions for filling out the form are described here.
How Do I Get an Employer Identification Number in Texas?
You can get it straight from the IRS by making an online or offline application as indicated above. All options for an EIN number Texas are free of charge.
How long does it take to get an EIN in Texas?
The confirmation period comes down to the mode used. Once the authorities have reviewed the application and deemed it meets the stipulated requirements, they send you a confirmation letter as follows:
Online
At the end of the steps, you get a copy of the letter. As such, you do not have to wait like with other methods and you can start using the said copy for official purposes. In about 4-5 weeks, you should receive a copy in your mail. On the plus side, you will not need this other copy to start transacting, making an online application the best option for anyone in a hurry.
Fax
This applies to people who may prefer this method or those who cannot use online means for one reason or the other. The letter should be ready within 4-7 business days, after which, you can use it for official undertakings.
It takes a while for a mail application to yield results and you can wait for anything from four to eight weeks to receive your letter. While this method is slow, it might appeal to some people. For example, if you cannot use online means, this might be the only solution. It also works for people who do not mind waiting a while to get their Texas state EIN letters.
What Form Do I File for EIN in Texas?
Regardless of the mode used, you will have to fill an SS4 form. Doing this will not incur any fee. All it does is provide that you have the necessary information to process your application. The details for your EIN for your Texas business are as follows:
- The name of the entity. Please ensure that this name matches that in your registration documents. The authorities will follow up on this to ensure a complete match or else the process will not be successful.
- Where your business has another name aside from the legal one you indicated in the first line, you will need to include this as it also serves as an identifier for your operations.
- You will need to show who is in charge of handling matters of legal nature as pertain to the entity. It can be a member or a manager or anyone else who should receive documents about your taxes. In most cases, it is the agent to whom you assigned this role.
- You also need to show where the authorities should direct mail that relates to your filings. This address is likely to be the same used for returns, though in some cases, it might be different. You should also include the street address and the state. If these are similar, you can leave the subsequent sections blank.
- You also need to indicate who will run the business. It can also be the individual with the most control over the operations. It should be someone in the company who has a great deal of control over assets and can manage them directly or indirectly. Generally, this should be an owner.
- The number of people who own the business is also important and you should indicate this while showing that your registration is effective in the United States. Additionally, you should be clear about your type of business and get into how you would like to get taxed. Generally, the authorities will tax you based on the number of members. That means that if you own the operations by yourself, you fall under a sole proprietorship. Where you own the operations with another person, the authorities will look at you as a partnership. However, you have the right to decide how you would like to be treated. You can choose to be taxed as a corporation. Please note that electing a tax preference also has to follow through with filing another form and your work will not be over at this stage. Also, check with a tax professional who can guide you on the best option for you based on your fiscal status.
- The authorities would also like to know why getting this ID is important for you and you can check one of the reasons shown in the form. Some details may be necessary but there is no penalization for being brief. Moreover, you should state when you started doing business and when your accounting year comes to an end. The number of people you will hire is also included, where you should indicate how many people you expect to hire in the first year of operation.
- You can then finish up with some minor details about your operations including the activities in which you will engage.
Just like that, your form is ready and you can go ahead with the filing process to apply for an EIN for your LLC.