Line by Line Form 1099-OID Instructions for 2023 Tax Year

Updated on October 16, 2023 - 15.00 AM by Admin, TaxBandits

Form 1099-OID reports a particular type of interest from certain debt instruments (bonds, notes, certificates of deposit ) that were issued at a lower price than what they can be redeemed
for at maturity.

Keep reading for a line-by-line overview of the Form 1099-OID instructions.

In this article, we cover the following topics:

1. Form 1099-OID Overview

Form 1099-OID is an IRS Tax Form used to report the amount of OID (Original Issue Discount) included in your taxable income of at least $10. Original Issue Discount refers to the debt instruments issued at a discount price less than that of the stated redemption price at the
time of maturity.

2. The Complete IRS Form 1099-OID Instructions for 2023

In total, IRS Form 1099-OID consists of 14 fields/boxes, and each section requires certain information to complete the reporting. Here is a breakdown of the information needed to complete Form 1099-OID.

Before getting into the more detailed information on Form 1099-OID, you will first enter the payer’s basic information.

Completing The Payer’s Information on Form 1099-OID

The following payer information is required:

  • Payer’s Address (street address, city or town, state or province, country, and ZIP or foreign postal code).
  • Payer’s TIN.
IRS Form 1099-OID for 2023

Completing The Recipient’s Information on Form 1099-OID

The following recipient information is required:

  • Recipient's name
  • Recipient's TIN
  • Recipient’s Address (street address, city or town, state or province, country, and ZIP or foreign postal code)
  • Account Number (Account number is required when the filer reports more than one Form 1099-OId and uses multiple accounts for the recipient.)

Completing Other Information on Form 1099-OID

From Box 1 to Box 14, the IRS requires the following information which is listed below.

IRS Form 1099-OID For 2023
  • Box 1: Original Discount Amount For The Year

    Enter the amount of OID that is allocated for the current tax year. This is the taxable income that should be reported on the recipient's tax return even though you don’t receive payment for it.

  • Box 2: Other Periodic Interest

    Enter the taxable interest that you actually paid during the year in box 2. Other periodic interest is the original interest paid on the debt instruments during the current year, excluding the OID amount.

  • Box 3: Early Withdrawal Penalty

    In box 3, enter the penalty taxpayers pay for early withdrawal before the maturity date.

  • Box 4: Federal Income Tax Withheld

    In box 4, enter the amount of federal income tax withheld from the amount paid including backup withholdings.

  • Box 5: Market Discount

    Enter the amount of market discount that was acquired on the debt instrument during the calendar year. This box is to report covered security acquired with OID and market discount.

  • Box 6: Acquisition Premium

    Enter the amount of Premium amortization for the year the debt instrument was owned by the investor/recipient.

  • Box 7: Description

    Enter the information about the debt instruments which includes CUSIP number, coupon rate, and year of maturity.

  • Box 8: Original Issue Discount in U.S. Treasury Obligations

    Enter the OID amount on U.S Treasury obligations for the year that the taxpayer owned it.

  • Box 9: Investment Expenses

    Enter the number of investment expenses taxpayer shares from a single class REMIC. Note these expenses are no longer deductible.

  • Box 10: Bond Premium

    Enter the bond premium amount for covered taxable securities.

  • Box 11: Tax-exempt OID

    Enter the amount of Tax-exempt interest on OID.

    Only enter the tax-exempt OID amount that was acquired on or after January 1, 2017. You are not required to report tax-exempt OID acquired before January 1, 2017.

  • Box 12-14:

    This box is for payers filing for both federal and state programs. Enter the state withholding information related to the Income which includes the State ID number, state abbreviation, and amount of tax withheld.

3. Advantages of E-Filing Form 1099-OID with TaxBandits

Filing Form 1099-OID with TaxBandits has many great benefits.

Easy filling and Instant filing Status

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  • Advanced Data Validation

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  • Stay up to Date with Latest Form Changes

    With TaxBandits, you can easily stay up-to-date with the latest IRS changes to Form 1099-OID.

  • Post Mailing and Online Access

    TaxBandits offers solutions for recipient copies with postal mailing services and online access for recipients to view and download their forms.

  • Affordable Pricing

    Avoid overspending on your IRS filing, with TaxBandits you can begin filing Form 1099-OID for as little as $0.80/form.

4. How to E-file Form 1099-OID With TaxBandits?

Filing Form 1099-OID has never been easier! The application is cloud-based, meaning there is no need to purchase and download any costly software to file. The process of filing with TaxBandits is simple and straightforward.

Follow the steps below to get started filing Form 1099-OID with TaxBandits.

  • Step 1: Create a free TaxBandits account
  • Step 2: Enter the necessary information on Form 1099-OID
  • Step 3: Review and transmit the form to the IRS

Get started with TaxBandits today. E-file Form 1099-OID in minutes and get instant updates about the filing status.

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