Quick answer
To form a Texas LLC, file Form 205, Certificate of Formation, with the Texas Secretary of State and pay $300. File online through the SOS portal for the fastest approval.
After that, you’ll owe no Texas income tax (Texas has none) and, for most freelancers, $0 franchise tax. The no-tax-due threshold is $2.65 million of annual revenue for 2026 and 2027 reports. You still must file a Public Information Report by May 15 each year, starting the year after you form.
There is no Texas annual report fee, and US-owned LLCs no longer file BOI reports with FinCEN.
Texas LLC costs at a glance
| Item | Cost | When |
|---|---|---|
| Certificate of Formation (Form 205) | $300 | Once, at formation |
| Name reservation (Form 501, optional) | About $40 | Before filing, if you want to hold a name |
| Assumed name certificate (optional DBA) | About $25 at the SOS, plus county filing for some entities | If you use another name |
| Registered agent service (optional) | About $100 to $300 a year | Annually |
| Franchise tax | $0 for most small LLCs (revenue at or under $2.65M) | May 15 each year |
| Public Information Report | $0 | May 15 each year |
| EIN | Free from the IRS | Once |
Online filings may add a small processing fee. Fees can change, so confirm on the Texas SOS fee schedule (Form 806).
Step-by-step: forming your Texas LLC
1. Choose a name
Your name must include “Limited Liability Company,” “Limited Company,” or an abbreviation like “LLC” or “Ltd. Co.” It must be distinguishable from other entities on file. Check availability through the SOS system. If you want to hold a name before filing, use Form 501.
2. Appoint a registered agent
Texas requires a registered agent with a physical Texas address who is available during business hours. You can serve yourself if you live in Texas. Many freelancers use a service to keep their home address off the public filing. See our article Do I Need a Registered Agent for My LLC?
3. File Form 205, Certificate of Formation
File online through the Secretary of State’s SOSPortal, the new online filing system the state is launching in late September 2026 in place of SOSDirect. Form 205 asks for:
- LLC name
- Registered agent and registered office address
- Governing authority: member-managed (most freelancers) or manager-managed
- Names and addresses of the initial members or managers
- Organizer name and signature
- Optional effective date
Pay the $300 fee. Online filings are typically processed within a few business days. Mail filings take longer.
4. Create an operating agreement
Texas calls it a company agreement. It isn’t filed with the state and isn’t legally required, but it documents ownership and helps show the LLC is separate from you.
5. Get an EIN and open a bank account
Apply for a free EIN on IRS.gov, then open a business checking account with your certificate of formation and EIN. Keep business and personal money apart. See How to Separate Business and Personal Finances.
6. Check sales tax and local permits
Most professional services aren’t taxable in Texas. Some are, including data processing and certain information services, which can affect developers and IT freelancers. If you sell taxable goods or services, get a sales and use tax permit from the Comptroller. Also check city or county requirements. See Do Freelancers Need a Business License?.
Texas franchise tax and annual reports
Texas doesn’t have a traditional annual report for LLCs. Instead, the Comptroller handles franchise tax reports.
| Topic | Rule for 2026 and 2027 reports |
|---|---|
| No-tax-due threshold | $2,650,000 annualized total revenue |
| What you file if under threshold | Public Information Report (Form 05-102) |
| No Tax Due Report | Eliminated starting with 2024 reports |
| Due date | May 15 (next business day if on a weekend) |
| First report | May 15 of the year after you form |
| Tax rate above threshold | 0.75% of taxable margin (0.375% retail/wholesale); EZ rate 0.331% under $20M |
Missing reports can lead to penalties and, eventually, forfeiture of your LLC’s right to do business in Texas. That can expose owners to personal liability for company debts. File online through the Comptroller’s Webfile.
Federal taxes for a Texas LLC
A single-member Texas LLC is taxed as a disregarded entity by default. You report profit on Schedule C and pay 15.3% self-employment tax, plus federal income tax. With no state income tax, a Texas freelancer’s main tax bill is federal. See Self-Employment Tax Explained.
Once profit is steady around $60,000 to $80,000 or more, an S-corp election may save payroll tax. Texas franchise tax treats S-corps the same as LLCs, so the threshold still applies.
Worked example: a freelance developer in Austin
Marcus forms a single-member LLC in March 2026. His 2026 revenue is $120,000, with $30,000 of expenses.
| Item | Amount |
|---|---|
| Form 205 filing (March 2026) | $300 |
| Registered agent | $0 (he serves himself) |
| Texas franchise tax: revenue $120,000, below $2.65M | $0 |
| First Public Information Report | Due May 15, 2027, $0 |
| Texas income tax | $0 |
| Federal SE tax on $90,000 profit: $90,000 × 92.35% × 15.3% | $12,717 |
His only Texas cost is the one-time $300. His biggest bill is federal: self-employment tax plus income tax, paid through quarterly estimated taxes.
BOI reporting
Texas LLCs owned by US persons do not file beneficial ownership information reports. FinCEN’s March 2025 interim final rule exempted domestic companies, and an August 2026 final rule made it permanent.
Frequently asked questions
How much does it cost to start an LLC in Texas?
The state filing fee is $300. Most small LLCs pay nothing after that, apart from optional registered agent service.
Does a Texas LLC pay franchise tax?
Only if annualized revenue exceeds $2.65 million for 2026 and 2027 reports. Below that, you file the Public Information Report and owe $0.
How long does it take to form an LLC in Texas?
Online filings are usually approved within a few business days. Expedited service is available for an extra fee.
Is Texas a community property state?
Yes. If you’re married, your spouse may have an interest in LLC ownership. This matters for S-corp election consents and estate planning.
This article is general information, not legal or tax advice. Consult an attorney, CPA or Enrolled Agent for your situation.
Related guides
- How to Start an LLC in California
- How to Start an LLC as a Freelancer: Step-by-Step
- How Much Does It Cost to Form an LLC? Fees by State
- Best LLC Formation Services Compared
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
Texas Secretary of State: Business forms (Form 205, Form 501); Texas Comptroller: Franchise Tax; Texas Legal Guide: Texas franchise tax 2026; Beancount: Texas franchise tax Public Information Report 2026; FinCEN: BOI reporting. Example figures are FreelancerTaxHQ illustrations.
Official resources linked in this guide: IRS: Self-Employment Tax; IRS: Tax preparer credentials.