Form 1099-OID

What is Tax Form 1099-OID?

Tax Form 1099-OID is used to report Original Issue Discount (OID) on debt instruments. OID is the difference between the face value of a bond or other debt security and its issue price. This form is generally used by investors who hold bonds or other debt securities that were issued at a discount. The issuer of the debt security is responsible for reporting the OID income to the IRS and to the bondholder. This ensures that the holder properly reports their income from the investment on their tax return.

Who Needs to File Tax Form 1099-OID?

Tax Form 1099-OID is required to be filed by individuals or organizations that meet the following criteria:

• You made a payment of $10 or more in OID during the year to an investor.
• You are the issuer of the debt instrument or the party responsible for paying interest or the OID amount.
• You are reporting OID income on U.S. Treasury securities, corporate bonds, or other debt instruments that have been issued at a discount.
• You are reporting OID on foreign debt instruments: If you are reporting Original Issue Discount (OID) on foreign-issued debt instruments, you need to file Form 1099-OID for U.S. taxpayers who are the recipients of such income.
• You are reporting OID on bonds purchased at a discount: If you purchased bonds at a discount and the OID is taxable, you’ll need to file the form to report the OID income received by the bondholder.

This form is primarily used to report interest or discount income to both the IRS and the recipient. If you’re an issuer or responsible party, make sure you file it accordingly.

When to File Tax Form 1099-OID in 2025?

Here’s a simple guide to the deadlines for filing Tax Form 1099-OID in 2025:

• January 31, 2025: Provide a copy of Form 1099-OID to the recipient (the investor you paid OID to).
• February 28, 2025: File the form with the IRS by mail.
• March 31, 2025: File the form with the IRS electronically.

If there are any errors found after submission, correct them promptly to avoid penalties.

What Are the Penalties for Filing Tax Form 1099-OID Late?

If you fail to file Tax Form 1099-OID on time in 2025, the IRS may impose penalties based on how late you file. Here’s a breakdown:

• $50 per form: If you file up to 30 days late (by March 31, 2025).
• $110 per form: If you file more than 30 days late but before August 1, 2025.
• $280 per form: If you file after August 1, 2025 or fail to file at all.
• Higher penalties for intentional disregard: If you deliberately fail to file, the penalty can reach $570 or more per form, with no maximum limit.

Make sure to file on time to avoid these penalties and file corrections quickly if any mistakes are found.

How to File Tax Form 1099-OID Online?

Filing Tax Form 1099-OID online is an easy and efficient process. Here’s how to do it:

1. Choose an IRS-approved e-file provider:
   • Find an authorized e-file service on the IRS website or use reliable software like TurboTax, TaxAct, or others
2. Create an account or log in:
   • Register with the selected provider and set up your business profile, including your Employer Identification Number (EIN).
3. Enter payment information:
   • Input the recipient’s name, address, and Taxpayer Identification Number (TIN), along with the OID amount and other relevant details.
4. Review the information:
   • Double-check all the entered information to avoid mistakes, especially OID amounts and recipient details.
5. File the form electronically:
   • Once you’ve confirmed everything, submit the form via the e-filing system. You’ll get confirmation when the IRS accepts i
6. Send a copy to the recipient:
   • Make sure to send the recipient their copy by January 31.

Tips for Filing Tax Form 1099-OID

Here are some helpful tips to ensure that you file Tax Form 1099-OID correctly:

1. Verify the filing requirement:
   • You need to file the 1099-OID if you paid $10 or more in OID during the year.
2. Request accurate details in advance:
   • Obtain a completed Form W-9 from the recipient to ensure the correct Taxpayer Identification Number (TIN) is reported.
3. Mind the deadlines:
   • Provide a copy of the form to recipients by January 31, 2025, and submit it to the IRS by the respective deadlines.
4. Double-check for accuracy:
   • Carefully review all the details, especially the OID amounts and recipient information.
5. Consider e-filing:
   • E-filing is quicker, reduces the likelihood of errors, and gives instant confirmation from the IRS.
6. Keep a record:
   • Retain copies of the form and receipts for at least 3 years for your records.
7. Fix any errors right away:
   • If an error occurs, make sure to submit a corrected form immediately to prevent further issues.
8. Consult a tax professional if needed:
   • If you discover mistakes, submit a corrected form to prevent penalties.

These tips will help simplify the filing process for Form 1099-OID and reduce the chances of encountering problems.

1099-OID Form FAQ