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How Do I File My 2009 Taxes Online

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How Do I File My 2009 Taxes Online

How do i file my 2009 taxes online Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. How do i file my 2009 taxes online Adjustment for premium. How do i file my 2009 taxes online Adjustment for acquisition premium. How do i file my 2009 taxes online Adjustment for market discount. How do i file my 2009 taxes online Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. How do i file my 2009 taxes online “Original issue discount” is defined first. How do i file my 2009 taxes online The other terms are listed alphabetically. How do i file my 2009 taxes online Original issue discount (OID). How do i file my 2009 taxes online   OID is a form of interest. How do i file my 2009 taxes online It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). How do i file my 2009 taxes online Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. How do i file my 2009 taxes online Accrual period. How do i file my 2009 taxes online   An accrual period is an interval of time used to measure OID. How do i file my 2009 taxes online The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. How do i file my 2009 taxes online Acquisition premium. How do i file my 2009 taxes online   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. How do i file my 2009 taxes online A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. How do i file my 2009 taxes online See Premium, later. How do i file my 2009 taxes online Adjusted issue price. How do i file my 2009 taxes online   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. How do i file my 2009 taxes online In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. How do i file my 2009 taxes online The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. How do i file my 2009 taxes online Debt instrument. How do i file my 2009 taxes online   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). How do i file my 2009 taxes online It generally does not include an annuity contract. How do i file my 2009 taxes online Issue price. How do i file my 2009 taxes online   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. How do i file my 2009 taxes online Market discount. How do i file my 2009 taxes online   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. How do i file my 2009 taxes online An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. How do i file my 2009 taxes online The market discount is the difference between the issue price plus accrued OID and your adjusted basis. How do i file my 2009 taxes online Premium. How do i file my 2009 taxes online   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. How do i file my 2009 taxes online The premium is the excess of the adjusted basis over the payable amounts. How do i file my 2009 taxes online See Publication 550 for information on the tax treatment of bond premium. How do i file my 2009 taxes online Qualified stated interest. How do i file my 2009 taxes online   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. How do i file my 2009 taxes online Stated redemption price at maturity. How do i file my 2009 taxes online   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. How do i file my 2009 taxes online Yield to maturity (YTM). How do i file my 2009 taxes online   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. How do i file my 2009 taxes online The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. How do i file my 2009 taxes online If you do not have this information, consult your broker, tax advisor, or the issuer. How do i file my 2009 taxes online Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. How do i file my 2009 taxes online If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. How do i file my 2009 taxes online The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. How do i file my 2009 taxes online For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. How do i file my 2009 taxes online The following discussions explain what information is contained in each section of the list. How do i file my 2009 taxes online Section I. How do i file my 2009 taxes online   This section contains publicly offered, long-term debt instruments. How do i file my 2009 taxes online Section I-A: Corporate Debt Instruments Issued Before 1985. How do i file my 2009 taxes online Section I-B: Corporate Debt Instruments Issued After 1984. How do i file my 2009 taxes online Section I-C: Inflation-Indexed Debt Instruments. How do i file my 2009 taxes online For each publicly offered debt instrument in Section I, the list contains the following information. How do i file my 2009 taxes online The name of the issuer. How do i file my 2009 taxes online The Committee on Uniform Security Identification Procedures (CUSIP) number. How do i file my 2009 taxes online The issue date. How do i file my 2009 taxes online The maturity date. How do i file my 2009 taxes online The issue price expressed as a percent of principal or of stated redemption price at maturity. How do i file my 2009 taxes online The annual stated or coupon interest rate. How do i file my 2009 taxes online (This rate is shown as 0. How do i file my 2009 taxes online 00 if no annual interest payments are provided. How do i file my 2009 taxes online ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. How do i file my 2009 taxes online The total OID accrued up to January 1 of a calendar year. How do i file my 2009 taxes online (This information is not available for every instrument. How do i file my 2009 taxes online ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. How do i file my 2009 taxes online The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. How do i file my 2009 taxes online Section II. How do i file my 2009 taxes online   This section contains stripped coupons and principal components of U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury and Government-Sponsored Enterprise debt instruments. How do i file my 2009 taxes online These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. How do i file my 2009 taxes online This section also includes debt instruments backed by U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury securities that represent ownership interests in those securities. How do i file my 2009 taxes online   The obligations listed in Section II are arranged by maturity date. How do i file my 2009 taxes online The amounts listed are the total OID for a calendar year per $1,000 of redemption price. How do i file my 2009 taxes online Section III. How do i file my 2009 taxes online   This section contains short-term discount obligations. How do i file my 2009 taxes online Section III-A: Short-Term U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury Bills. How do i file my 2009 taxes online Section III-B: Federal Home Loan Banks. How do i file my 2009 taxes online Section III-C: Federal National Mortgage Association. How do i file my 2009 taxes online Section III-D: Federal Farm Credit Banks. How do i file my 2009 taxes online Section III-E: Federal Home Loan Mortgage Corporation. How do i file my 2009 taxes online Section III-F: Federal Agricultural Mortgage Corporation. How do i file my 2009 taxes online    Information that supplements Section III-A is available on the Internet at http://www. How do i file my 2009 taxes online treasurydirect. How do i file my 2009 taxes online gov/tdhome. How do i file my 2009 taxes online htm. How do i file my 2009 taxes online   The short-term obligations listed in this section are arranged by maturity date. How do i file my 2009 taxes online For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. How do i file my 2009 taxes online Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. How do i file my 2009 taxes online Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. How do i file my 2009 taxes online U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online savings bonds. How do i file my 2009 taxes online Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. How do i file my 2009 taxes online Obligations issued by tax-exempt organizations. How do i file my 2009 taxes online OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. How do i file my 2009 taxes online Mortgage-backed securities and mortgage participation certificates. How do i file my 2009 taxes online Long-term OID debt instruments issued before May 28, 1969. How do i file my 2009 taxes online Short-term obligations, other than the obligations listed in Section III. How do i file my 2009 taxes online Debt instruments issued at a discount by states or their political subdivisions. How do i file my 2009 taxes online REMIC regular interests and CDOs. How do i file my 2009 taxes online Commercial paper and banker's acceptances issued at a discount. How do i file my 2009 taxes online Obligations issued at a discount by individuals. How do i file my 2009 taxes online Foreign obligations not traded in the United States and obligations not issued in the United States. How do i file my 2009 taxes online Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. How do i file my 2009 taxes online In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. How do i file my 2009 taxes online You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. How do i file my 2009 taxes online See Backup Withholding, later. How do i file my 2009 taxes online If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. How do i file my 2009 taxes online File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). How do i file my 2009 taxes online Electronic payee statements. How do i file my 2009 taxes online   You can issue Form 1099-OID electronically with the consent of the recipient. How do i file my 2009 taxes online More information. How do i file my 2009 taxes online   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. How do i file my 2009 taxes online Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. How do i file my 2009 taxes online To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. How do i file my 2009 taxes online If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. How do i file my 2009 taxes online Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. How do i file my 2009 taxes online If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. How do i file my 2009 taxes online A special rule is used to determine the original issue price for information reporting on U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury bills (T-bills) listed in Section III-A. How do i file my 2009 taxes online Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. How do i file my 2009 taxes online This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. How do i file my 2009 taxes online A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. How do i file my 2009 taxes online Example 1. How do i file my 2009 taxes online There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. How do i file my 2009 taxes online The price actually paid by the owner cannot be established by owner or middleman records. How do i file my 2009 taxes online You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. How do i file my 2009 taxes online The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. How do i file my 2009 taxes online Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. How do i file my 2009 taxes online For this purpose, you can rely on Section I of the OID list to determine the following information. How do i file my 2009 taxes online Whether a debt instrument has OID. How do i file my 2009 taxes online The OID to be reported on the Form 1099-OID. How do i file my 2009 taxes online In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. How do i file my 2009 taxes online You also can report OID on other long-term debt instruments. How do i file my 2009 taxes online Form 1099-OID. How do i file my 2009 taxes online   On Form 1099-OID for a calendar year show the following information. How do i file my 2009 taxes online Box 1. How do i file my 2009 taxes online The OID for the actual dates the owner held the debt instruments during a calendar year. How do i file my 2009 taxes online To determine this amount, see Figuring OID, next. How do i file my 2009 taxes online Box 2. How do i file my 2009 taxes online The qualified stated interest paid or credited during the calendar year. How do i file my 2009 taxes online Interest reported here is not reported on Form 1099-INT. How do i file my 2009 taxes online The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. How do i file my 2009 taxes online Box 3. How do i file my 2009 taxes online Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. How do i file my 2009 taxes online Do not reduce the amounts in boxes 1 and 2 by the forfeiture. How do i file my 2009 taxes online Box 4. How do i file my 2009 taxes online Any backup withholding for this debt instrument. How do i file my 2009 taxes online Box 7. How do i file my 2009 taxes online The CUSIP number, if any. How do i file my 2009 taxes online If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. How do i file my 2009 taxes online 50 2006). How do i file my 2009 taxes online If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. How do i file my 2009 taxes online Box 8. How do i file my 2009 taxes online The OID on a U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury obligation for the part of the year the owner held the debt instrument. How do i file my 2009 taxes online Box 9. How do i file my 2009 taxes online Investment expenses passed on to holders of a single-class REMIC. How do i file my 2009 taxes online Boxes 10-12. How do i file my 2009 taxes online Use to report any state income tax withheld for this debt instrument. How do i file my 2009 taxes online Figuring OID. How do i file my 2009 taxes online   You can determine the OID on a long-term debt instrument by using either of the following. How do i file my 2009 taxes online Section I of the OID list. How do i file my 2009 taxes online The income tax regulations. How do i file my 2009 taxes online Using Section I. How do i file my 2009 taxes online   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. How do i file my 2009 taxes online Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. How do i file my 2009 taxes online For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. How do i file my 2009 taxes online   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. How do i file my 2009 taxes online Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. How do i file my 2009 taxes online Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. How do i file my 2009 taxes online Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. How do i file my 2009 taxes online Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. How do i file my 2009 taxes online If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. How do i file my 2009 taxes online Report the result on Form 1099-OID in box 1. How do i file my 2009 taxes online Using the income tax regulations. How do i file my 2009 taxes online   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. How do i file my 2009 taxes online For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. How do i file my 2009 taxes online (If you use Section I-B, the OID is figured using 6-month accrual periods. How do i file my 2009 taxes online )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. How do i file my 2009 taxes online Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. How do i file my 2009 taxes online You must file an information return showing the reportable interest and OID, if any, on the CD. How do i file my 2009 taxes online These rules apply whether or not you sold the CD to the owner. How do i file my 2009 taxes online Report OID on a CD in the same way as OID on other debt instruments. How do i file my 2009 taxes online See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. How do i file my 2009 taxes online Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. How do i file my 2009 taxes online However, do not report the interest if either of the following apply. How do i file my 2009 taxes online You hold the bond as a nominee for the true owner. How do i file my 2009 taxes online The payee is a foreign person. How do i file my 2009 taxes online See Payments to foreign person under Backup Withholding, later. How do i file my 2009 taxes online Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. How do i file my 2009 taxes online The coupon may have been “stripped” (separated) from the bond and separately purchased. How do i file my 2009 taxes online However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. How do i file my 2009 taxes online Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. How do i file my 2009 taxes online The backup withholding is deducted at the time a cash payment is made. How do i file my 2009 taxes online See Pub. How do i file my 2009 taxes online 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. How do i file my 2009 taxes online Backup withholding generally applies in the following situations. How do i file my 2009 taxes online The payee does not give you a taxpayer identification number (TIN). How do i file my 2009 taxes online The IRS notifies you that the payee gave an incorrect TIN. How do i file my 2009 taxes online The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. How do i file my 2009 taxes online For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. How do i file my 2009 taxes online However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. How do i file my 2009 taxes online Short-term obligations. How do i file my 2009 taxes online   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. How do i file my 2009 taxes online However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. How do i file my 2009 taxes online   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. How do i file my 2009 taxes online However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. How do i file my 2009 taxes online If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. How do i file my 2009 taxes online Long-term obligations. How do i file my 2009 taxes online   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. How do i file my 2009 taxes online The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. How do i file my 2009 taxes online The amount to be withheld is limited to the cash paid. How do i file my 2009 taxes online Registered long-term obligations with cash payments. How do i file my 2009 taxes online   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. How do i file my 2009 taxes online The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. How do i file my 2009 taxes online If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. How do i file my 2009 taxes online For any payment, the required withholding is limited to the cash paid. How do i file my 2009 taxes online Payee not the original owner. How do i file my 2009 taxes online   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). How do i file my 2009 taxes online The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. How do i file my 2009 taxes online Bearer long-term obligations with cash payments. How do i file my 2009 taxes online   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. How do i file my 2009 taxes online For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. How do i file my 2009 taxes online For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. How do i file my 2009 taxes online The required withholding at maturity is limited to the cash paid. How do i file my 2009 taxes online Sales and redemptions. How do i file my 2009 taxes online   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. How do i file my 2009 taxes online Backup withholding applies in the following situations. How do i file my 2009 taxes online The payee does not give you a TIN. How do i file my 2009 taxes online The IRS notifies you that the payee gave an incorrect TIN. How do i file my 2009 taxes online For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. How do i file my 2009 taxes online Payments outside the United States to U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online person. How do i file my 2009 taxes online   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online trade or business. How do i file my 2009 taxes online Payments to foreign person. How do i file my 2009 taxes online   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. How do i file my 2009 taxes online U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online -source amount. How do i file my 2009 taxes online   Backup withholding and information reporting are not required for payments of U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. How do i file my 2009 taxes online A U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online resident is not a foreign person. How do i file my 2009 taxes online For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. How do i file my 2009 taxes online Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online person. How do i file my 2009 taxes online   For information about the 28% withholding tax that may apply to payments of U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online -source OID or interest to foreign persons, see Publication 515. How do i file my 2009 taxes online Foreign-source amount. How do i file my 2009 taxes online   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. How do i file my 2009 taxes online However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. How do i file my 2009 taxes online More information. How do i file my 2009 taxes online   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. How do i file my 2009 taxes online 6049-5. How do i file my 2009 taxes online Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. How do i file my 2009 taxes online It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. How do i file my 2009 taxes online It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. How do i file my 2009 taxes online However, the information provided does not cover every situation. How do i file my 2009 taxes online More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. How do i file my 2009 taxes online Including OID in income. How do i file my 2009 taxes online   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. How do i file my 2009 taxes online Exceptions. How do i file my 2009 taxes online   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. How do i file my 2009 taxes online U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online savings bonds. How do i file my 2009 taxes online Tax-exempt obligations. How do i file my 2009 taxes online (However, see Tax-Exempt Bonds and Coupons, later. How do i file my 2009 taxes online ) Obligations issued by individuals before March 2, 1984. How do i file my 2009 taxes online Loans of $10,000 or less between individuals who are not in the business of lending money. How do i file my 2009 taxes online (The dollar limit includes outstanding prior loans by the lender to the borrower. How do i file my 2009 taxes online ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. How do i file my 2009 taxes online   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. How do i file my 2009 taxes online Publication 550 also discusses rules for holders of REMIC interests and CDOs. How do i file my 2009 taxes online De minimis rule. How do i file my 2009 taxes online   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. How do i file my 2009 taxes online 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. How do i file my 2009 taxes online Debt instruments with de minimis OID are not listed in this publication. How do i file my 2009 taxes online There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. How do i file my 2009 taxes online Also, the de minimis rules generally do not apply to tax-exempt obligations. How do i file my 2009 taxes online Example 2. How do i file my 2009 taxes online You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. How do i file my 2009 taxes online One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. How do i file my 2009 taxes online Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. How do i file my 2009 taxes online Example 3. How do i file my 2009 taxes online Assume the same facts as Example 2, except the debt instrument was issued at $950. How do i file my 2009 taxes online You must report part of the $50 OID each year because it is more than $25. How do i file my 2009 taxes online Choice to report all interest as OID. How do i file my 2009 taxes online   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. How do i file my 2009 taxes online See Constant yield method under Debt Instruments Issued After 1984, later, for more information. How do i file my 2009 taxes online   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. How do i file my 2009 taxes online For more information, see Regulations section 1. How do i file my 2009 taxes online 1272-3. How do i file my 2009 taxes online Purchase after date of original issue. How do i file my 2009 taxes online   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. How do i file my 2009 taxes online If so, the OID reported to you on Form 1099-OID may have to be adjusted. How do i file my 2009 taxes online For more information, see Showing an OID adjustment under How To Report OID, later. How do i file my 2009 taxes online The following rules generally do not apply to contingent payment debt instruments. How do i file my 2009 taxes online Adjustment for premium. How do i file my 2009 taxes online   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. How do i file my 2009 taxes online Your adjustment is the total OID shown on your Form 1099-OID. How do i file my 2009 taxes online Adjustment for acquisition premium. How do i file my 2009 taxes online   If your debt instrument has acquisition premium, reduce the OID you report. How do i file my 2009 taxes online Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. How do i file my 2009 taxes online Adjustment for market discount. How do i file my 2009 taxes online   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. How do i file my 2009 taxes online Your adjustment is the accrued market discount for the year. How do i file my 2009 taxes online See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. How do i file my 2009 taxes online If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. How do i file my 2009 taxes online The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. How do i file my 2009 taxes online For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. How do i file my 2009 taxes online 1275-7. How do i file my 2009 taxes online Sale, exchange, or redemption. How do i file my 2009 taxes online   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. How do i file my 2009 taxes online If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. How do i file my 2009 taxes online Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). How do i file my 2009 taxes online   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. How do i file my 2009 taxes online Your basis, generally, is your cost increased by the OID you have included in income each year you held it. How do i file my 2009 taxes online In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How do i file my 2009 taxes online   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. How do i file my 2009 taxes online Example 4. How do i file my 2009 taxes online Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. How do i file my 2009 taxes online 00 on November 1 of Year 1. How do i file my 2009 taxes online The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. How do i file my 2009 taxes online The debt instrument provides for semiannual payments of interest at 10%. How do i file my 2009 taxes online Assume the debt instrument is a capital asset in Larry's hands. How do i file my 2009 taxes online The debt instrument has $13,765. How do i file my 2009 taxes online 00 of OID ($100,000 stated redemption price at maturity minus $86,235. How do i file my 2009 taxes online 00 issue price). How do i file my 2009 taxes online Larry sold the debt instrument for $90,000 on November 1 of Year 4. How do i file my 2009 taxes online Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. How do i file my 2009 taxes online 00 of OID in income and has increased his basis by that amount to $90,791. How do i file my 2009 taxes online 00. How do i file my 2009 taxes online Larry has realized a loss of $791. How do i file my 2009 taxes online 00. How do i file my 2009 taxes online All of Larry's loss is capital loss. How do i file my 2009 taxes online Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. How do i file my 2009 taxes online Form 1099-OID shows all OID income in box 1 except OID on a U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury obligation, which is shown in box 8. How do i file my 2009 taxes online It also shows, in box 2, any qualified stated interest you must include in income. How do i file my 2009 taxes online (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. How do i file my 2009 taxes online ) A copy of Form 1099-OID will be sent to the IRS. How do i file my 2009 taxes online Do not attach your copy to your tax return. How do i file my 2009 taxes online Keep it for your records. How do i file my 2009 taxes online If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. How do i file my 2009 taxes online A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. How do i file my 2009 taxes online Form 1099-OID not received. How do i file my 2009 taxes online   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. How do i file my 2009 taxes online Refiguring OID. How do i file my 2009 taxes online   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. How do i file my 2009 taxes online You bought the debt instrument at a premium or at an acquisition premium. How do i file my 2009 taxes online The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury securities). How do i file my 2009 taxes online The debt instrument is a contingent payment or inflation-indexed debt instrument. How do i file my 2009 taxes online See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. How do i file my 2009 taxes online Refiguring interest. How do i file my 2009 taxes online   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. How do i file my 2009 taxes online Nominee. How do i file my 2009 taxes online   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. How do i file my 2009 taxes online ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. How do i file my 2009 taxes online Show the owner of the debt instrument as the “recipient” and you as the “payer. How do i file my 2009 taxes online ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. How do i file my 2009 taxes online You must also give a copy of the Form 1099-OID to the actual owner. How do i file my 2009 taxes online However, you are not required to file a nominee return to show amounts belonging to your spouse. How do i file my 2009 taxes online See the Form 1099 instructions for more information. How do i file my 2009 taxes online   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. How do i file my 2009 taxes online How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. How do i file my 2009 taxes online Form 1040 or Form 1040A required. How do i file my 2009 taxes online   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. How do i file my 2009 taxes online You received a Form 1099-OID as a nominee for the actual owner. How do i file my 2009 taxes online Your total interest and OID income for the year was more than $1,500. How do i file my 2009 taxes online Form 1040 required. How do i file my 2009 taxes online   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. How do i file my 2009 taxes online For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. How do i file my 2009 taxes online Also, you must use Form 1040 if you were charged an early withdrawal penalty. How do i file my 2009 taxes online Where to report. How do i file my 2009 taxes online   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. How do i file my 2009 taxes online Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. How do i file my 2009 taxes online Also include any other OID and interest income for which you did not receive a Form 1099. How do i file my 2009 taxes online Showing an OID adjustment. How do i file my 2009 taxes online   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. How do i file my 2009 taxes online   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. How do i file my 2009 taxes online If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. How do i file my 2009 taxes online Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How do i file my 2009 taxes online Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. How do i file my 2009 taxes online Subtract that OID from the subtotal and enter the result on line 2. How do i file my 2009 taxes online If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. How do i file my 2009 taxes online Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How do i file my 2009 taxes online Below the subtotal, write “OID Adjustment” and show the additional OID. How do i file my 2009 taxes online Add that OID to the subtotal and enter the result on line 2. How do i file my 2009 taxes online Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. How do i file my 2009 taxes online It also may depend on the type of the debt instrument. How do i file my 2009 taxes online There are different rules for each of the following debt instruments. How do i file my 2009 taxes online Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. How do i file my 2009 taxes online Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. How do i file my 2009 taxes online Debt instruments issued after July 1, 1982, and before 1985. How do i file my 2009 taxes online Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). How do i file my 2009 taxes online Contingent payment debt instruments issued after August 12, 1996. How do i file my 2009 taxes online Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. How do i file my 2009 taxes online Zero coupon bonds. How do i file my 2009 taxes online   The rules for figuring OID on zero coupon bonds backed by U. How do i file my 2009 taxes online S. How do i file my 2009 taxes online Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. How do i file my 2009 taxes online Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. How do i file my 2009 taxes online The OID, which is taxed as ordinary income, generally equals the following amount. How do i file my 2009 taxes online   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. How do i file my 2009 taxes online If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. How do i file my 2009 taxes online Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. How do i file my 2009 taxes online For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. How do i file my 2009 taxes online Your basis in the debt instrument is increased by the OID you include in income. How do i file my 2009 taxes online Form 1099-OID. How do i file my 2009 taxes online   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How do i file my 2009 taxes online However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How do i file my 2009 taxes online See Reduction for acquisition premium, later. How do i file my 2009 taxes online If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How do i file my 2009 taxes online irs. How do i file my 2009 taxes online gov/pub1212 by clicking the link under Recent Developments. How do i file my 2009 taxes online Form 1099-OID not received. How do i file my 2009 taxes online    The OID listed is for each $1,000 of redemption price. How do i file my 2009 taxes online You must adjust the listed amount if your debt instrument has a different principal amount. How do i file my 2009 taxes online For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How do i file my 2009 taxes online   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. How do i file my 2009 taxes online (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. How do i file my 2009 taxes online ) If you did not hold the debt instrument the entire year, figure your OID using the following method. How do i file my 2009 taxes online Divide the OID shown by 12. How do i file my 2009 taxes online Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. How do i file my 2009 taxes online This is the OID to include in income unless you paid an acquisition premium. How do i file my 2009 taxes online The reduction for acquisition premium is discussed next. How do i file my 2009 taxes online Reduction for acquisition premium. How do i file my 2009 taxes online   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. How do i file my 2009 taxes online Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. How do i file my 2009 taxes online This is the monthly OID. How do i file my 2009 taxes online Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. How do i file my 2009 taxes online (If the result is zero or less, stop here. How do i file my 2009 taxes online You did not pay an acquisition premium. How do i file my 2009 taxes online ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. How do i file my 2009 taxes online Subtract the amount figured in (3) from the amount figured in (1). How do i file my 2009 taxes online This is the OID to include in income for each month you hold the debt instrument during the year. How do i file my 2009 taxes online Transfers during the month. How do i file my 2009 taxes online   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. How do i file my 2009 taxes online Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. How do i file my 2009 taxes online Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. How do i file my 2009 taxes online For information about showing the correct OID on your tax return, see How To Report OID, earlier. How do i file my 2009 taxes online Form 1099-OID. How do i file my 2009 taxes online   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How do i file my 2009 taxes online However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How do i file my 2009 taxes online See Constant yield method and the discussions on acquisition premium that follow, later. How do i file my 2009 taxes online If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How do i file my 2009 taxes online irs. How do i file my 2009 taxes online gov/pub1212 by clicking the link under Recent Developments. How do i file my 2009 taxes online Form 1099-OID not received. How do i file my 2009 taxes online    The OID listed is for each $1,000 of redemption price. How do i file my 2009 taxes online You must adjust the listed amount if your debt instrument has a different principal amount. How do i file my 2009 taxes online For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How do i file my 2009 taxes online   If you held the debt instrument the entire year, use the OID shown in Section I-A. How do i file my 2009 taxes online (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How do i file my 2009 taxes online ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. How do i file my 2009 taxes online Method 1. How do i file my 2009 taxes online    Divide the total OID for a calendar year by 365 (366 for leap years). How do i file my 2009 taxes online Multiply the result in (1) by the number of days you held the debt instrument during that particular year. How do i file my 2009 taxes online  This computation is an approximation and may result in a slightly higher OID than Method 2. How do i file my 2009 taxes online Method 2. How do i file my 2009 taxes online    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. How do i file my 2009 taxes online (See Accrual period under Constant yield method, next. How do i file my 2009 taxes online ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How do i file my 2009 taxes online If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. How do i file my 2009 taxes online Add the results of (2) and (3). How do i file my 2009 taxes online This is the OID to include in income, unless you paid an acquisition premium. How do i file my 2009 taxes online (The reduction for acquisition premium is discussed later. How do i file my 2009 taxes online ) Constant yield method. How do i file my 2009 taxes online   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. How do i file my 2009 taxes online OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How do i file my 2009 taxes online   Figure the OID allocable to any accrual period as follows. How do i file my 2009 taxes online Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. How do i file my 2009 taxes online Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How do i file my 2009 taxes online Accrual period. How do i file my 2009 taxes online   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. How do i file my 2009 taxes online Your tax year will usually include parts of two accrual periods. How do i file my 2009 taxes online Daily OID. How do i file my 2009 taxes online   The OID for any accrual period is allocated equally to each day in the accrual period. How do i file my 2009 taxes online You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. How do i file my 2009 taxes online If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. How do i file my 2009 taxes online Figuring daily OID. How do i file my 2009 taxes online   The daily OID for the initial accrual period is figured using the following formula. How do i file my 2009 taxes online   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How do i file my 2009 taxes online Reduction for acquisition premium on debt instruments purchased before July 19, 1984. How do i file my 2009 taxes online   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How do i file my 2009 taxes online Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. How do i file my 2009 taxes online Reduction for acquisition premium on debt instruments purchased after July 18, 1984. How do i file my 2009 taxes online   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How do i file my 2009 taxes online However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. How do i file my 2009 taxes online To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. How do i file my 2009 taxes online The numerator is the acquisition premium. How do i file my 2009 taxes online The denominator is the total OID remaining for the debt instrument after your purchase date. How do i file my 2009 taxes online Section I-A is available at www. How do i file my 2009 taxes online irs. How do i file my 2009 taxes online gov/pub1212 and clicking the link under Recent Developments. How do i file my 2009 taxes online Using Section I-A to figure accumulated OID. How do i file my 2009 taxes online   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. How do i file my 2009 taxes online The amount from the “Total OID to January 1, YYYY” column for your debt instrument. How do i file my 2009 taxes online The OID from January 1 of a calendar year to the date of purchase, figured as follows. How do i file my 2009 taxes online Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. How do i file my 2009 taxes online Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. How do i file my 2009 taxes online Add the amounts figured in (2a) and (2b). How do i file my 2009 taxes online Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. How do i file my 2009 taxes online You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. How do i file my 2009 taxes online Your basis in the debt instrument is increased by the OID you include in income. How do i file my 2009 taxes online For information about showing the correct OID on your tax return, see How To Report OID, earlier. How do i file my 2009 taxes online Form 1099-OID. How do i file my 2009 taxes online   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. How do i file my 2009 taxes online However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How do i file my 2009 taxes online See Constant yield method and Reduction for acquisition premium, later. How do i file my 2009 taxes online   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. How do i file my 2009 taxes online See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. How do i file my 2009 taxes online If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. How do i file my 2009 taxes online irs. How do i file my 2009 taxes online gov/pub1212 by clicking the link under Recent Developments. How do i file my 2009 taxes online Form 1099-OID not received. How do i file my 2009 taxes online   The OID listed is for each $1,000 of redemption price. How do i file my 2009 taxes online You must adjust the listed amount if your debt instrument has a different principal amount. How do i file my 2009 taxes online For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How do i file my 2009 taxes online   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. How do i file my 2009 taxes online (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How do i file my 2009 taxes online ) If you did not hold the debt instrument the entire year, figure your OID as follows. How do i file my 2009 taxes online Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. How do i file my 2009 taxes online (See Accrual period under Constant yield method, later. How do i file my 2009 taxes online ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How do i file my 2009 taxes online Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. How do i file my 2009 taxes online Add the results of (2) and (3). How do i file my 2009 taxes online This is the OID to include in income for that year, unless you paid an acquisition premium. How do i file my 2009 taxes online (The reduction for acquisition premium is discussed later. How do i file my 2009 taxes online ) Tax-exempt bond. How do i file my 2009 taxes online   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How do i file my 2009 taxes online You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. How do i file my 2009 taxes online In general, use the rules that follow to determine your OID. How do i file my 2009 taxes online Constant yield method. How do i file my 2009 taxes online   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. How do i file my 2009 taxes online (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. How do i file my 2009 taxes online ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How do i file my 2009 taxes online   Figure the OID allocable to any accrual period as follows. How do i file my 2009 taxes online Multiply the adjusted issue price at the beginning of the accrual period by a fraction. How do i file my 2009 taxes online The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. How do i file my 2009 taxes online The yield must be stated appropriately taking into account the length of the particular accrual period. How do i file my 2009 taxes online Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How do i file my 2009 taxes online Accrual period. How do i file my 2009 taxes online   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. How do i file my 2009 taxes online For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. How do i file my 2009 taxes online Any short period is included as the first accrual period. How do i file my 2009 taxes online   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. How do i file my 2009 taxes online However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. How do i file my 2009 taxes online Daily OID. How do i file my 2009 taxes online   The OID for any accrual period is allocated equally to each day in the accrual period. How do i file my 2009 taxes online Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. How do i file my 2009 taxes online Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. How do i file my 2009 taxes online If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. How do i file my 2009 taxes online Figuring daily OID. How do i file my 2009 taxes online   The daily OID for the initial accrual period is figured using the following formula. How do i file my 2009 taxes online   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How do i file my 2009 taxes online Example 5. How do i file my 2009 taxes online On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. How do i file my 2009 taxes online 17. How do i file my 2009 taxes online According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. How do i file my 2009 taxes online The yield to maturity is 12%, compounded semiannually. How do i file my 2009 taxes online The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. How do i file my 2009 taxes online The accrual periods are the 6-month periods ending on each of these dates. How do i file my 2009 taxes online The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). How do i file my 2009 taxes online The daily OID for the first accrual period is figured as follows. How do i file my 2009 taxes online   ($86,235. How do i file my 2009 taxes online 17 x . How do i file my 2009 taxes online 12/2) – $5,000     181 days     = $174. How do i file my 2009 taxes online 11020 = $. How do i file my 2009 taxes online 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. How do i file my 2009 taxes online 17 + $174. How do i file my 2009 taxes online 11), or $86,409. How do i file my 2009 taxes online 28. How do i file my 2009 taxes online The number of days for the second accrual period (July 1 through December 31) is 184 days. How do i file my 2009 taxes online The daily OID for the second accrual period is figured as follows. How do i file my 2009 taxes online   ($86,409. How do i file my 2009 taxes online 28 x . How do i file my 2009 taxes online 12/2) – $5,000     184 days     = $184. How do i file my 2009 taxes online 55681 = $1. How do i file my 2009 taxes online 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. How do i file my 2009 taxes online 11 ($. How do i file my 2009 taxes online 95665 × 182 days) plus $184. How do i file my 2009 taxes online 56 ($1. How do i file my 2009 taxes online 00303 × 184 days), or $358. How do i file my 2009 taxes online 67. How do i file my 2009 taxes online Add the OID to the $10,000 interest you report on your income tax return for Year 1. How do i file my 2009 taxes online Example 6. How do i file my 2009 taxes online Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. How do i file my 2009 taxes online Also, the interest payment dates are October 31 and April 30 of each calendar year. How do i file my 2009 taxes online The accrual periods are the 6-month periods ending on each of these dates. How do i file my 2009 taxes online The number of days for the first accrual period (May 1 through October 31) is 184 days. How do i file my 2009 taxes online The daily OID for the first accrual period is figured as follows. How do i file my 2009 taxes online   ($86,235. How do i file my 2009 taxes online 17 x . How do i file my 2009 taxes online 12/2) – $5,000     184 days     = $174. How do i file my 2009 taxes online 11020 = $. How do i file my 2009 taxes online 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). How do i file my 2009 taxes online The daily OID for the second accrual period is figured as follows. How do i file my 2009 taxes online   ($86,409. How do i file my 2009 taxes online 28 x . How do i file my 2009 taxes online 12/2) – $5,000     181 days     = $184. How do i file my 2009 taxes online 55681 = $1. How do i file my 2009 taxes online 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. How do i file my 2009 taxes online 31 of OID in income. How do i file my 2009 taxes online This is $174. How do i file my 2009 taxes online 11 ($. How do i file my 2009 taxes online 94625 × 184 days) for the period May 1 through October 31 plus $62. How do i file my 2009 taxes online 20 ($1. How do i file my 2009 taxes online 01965 × 61 days) for the period November 1 through December 31. How do i file my 2009 taxes online The OID is added to the $5,000 interest income paid on October 31 of Year 1. How do i file my 2009 taxes online Your basis in the debt instrument is increased by the OID you include in income. How do i file my 2009 taxes online On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. How do i file my 2009 taxes online 48 ($86,235. How do i file my 2009 taxes online 17 + $236. How do i file my 2009 taxes online 31). How do i file my 2009 taxes online Short first accrual period. How do i file my 2009 taxes online   You may have to make adjustments if a debt instrument has a short first accrual period. How do i file my 2009 taxes online For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. How do i file my 2009 taxes online (The remaining accrual periods begin on May 1 and November 1. How do i file my 2009 taxes online ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. How do i file my 2009 taxes online You may use any reasonable compounding method in determining OID for a short period. How do i file my 2009 taxes online Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). How do i file my 2009 taxes online Consult your tax advisor for more information about making this computation. How do i file my 2009 taxes online   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. How do i file my 2009 taxes online Reduction for acquisition premium. How do i file my 2009 taxes online   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How do i file my 2009 taxes online To figure the daily acquisition premium, multiply the daily OID by the following fraction. How do i file my 2009 taxes online The numerator is the acquisition premium. How do i file my 2009 taxes online The denominator is the total OID remaining for the debt instrument after your purchase date. How do i file my 2009 taxes online Example 7. How do i file my 2009 taxes online Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. How do i file my 2009 taxes online The adjusted issue price on November 1 of Year 1 is $86,409. How do i file my 2009 taxes online 28 ($86,235. How do i file my 2009 taxes online 17 + $174. How do i file my 2009 taxes online 11). How do i file my 2009 taxes online In this case, you paid an acquisition premium of $590. How do i file my 2009 taxes online 72 ($87,000 − $86,409. How do i file my 2009 taxes online 28). How do i file my 2009 taxes online The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. How do i file my 2009 taxes online 1) Daily OID on date of purchase (2nd accrual period) $1. How do i file my 2009 taxes online 01965*  2)  Acquisition premium $590. How do i file my 2009 taxes online 72    3)  Total OID remaining after purchase date ($13,764. How do i file my 2009 taxes online 83 − $174. How do i file my 2009 taxes online 11) 13,590. How do i file my 2009 taxes online 72   4) Line 2 ÷ line 3 . How do i file my 2009 taxes online 04346  5)  Line 1 × line 4 . How do i file my 2009 taxes online 04432  6)  Daily OID reduced for the acquisition premium. How do i file my 2009 taxes online Line 1 − line 5 $0. How do i file my 2009 taxes online 97533  * As shown in Example 6. How do i file my 2009 taxes online The total OID to include in income for Year 1 is $59. How do i file my 2009 taxes online 50 ($. How do i file my 2009 taxes online 97533 × 61 days). How do i file my 2009 taxes online Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. How do i file my 2009 taxes online In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. How do i file my 2009 taxes online If you hold a contingent payment bond, you must report OID as it accrues each year. How do i file my 2009 taxes online Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. How do i file my 2009 taxes online To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. How do i file my 2009 taxes online Noncontingent bond method. How do i file my 2009 taxes online    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. How do i file my 2009 taxes online In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. How do i file my 2009 taxes online When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. How do i file my 2009 taxes online If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. How do i file my 2009 taxes online If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. How do i file my 2009 taxes online Form 1099-OID. How do i file my 2009 taxes online   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. How do i file my 2009 taxes online For example, the amount may not be correct if the contingent payment was different from the projected amount. How do i file my 2009 taxes online If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. How do i file my 2009 taxes online For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. How do i file my 2009 taxes online Figuring OID. How do i file my 2009 taxes online   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. How do i file my 2009 taxes online The issuer must make these available to you. How do i file my 2009 taxes online Comparable yield. How do i file my 2009 taxes online   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. How do i file my 2009 taxes online The comparable yield is determined as of the debt instrument's issue date. How do i file my 2009 taxes online Projected payment schedule. How do i file my 2009 taxes online   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. How do i file my 2009 taxes online The projected payment schedule is created by the issuer as of the debt instrument's issue date. How do i file my 2009 taxes online It is used to determine the issuer's and holder's interest accruals and adjustments. How do i file my 2009 taxes online Steps for figuring OID. How do i file my 2009 taxes online   Figure the OID on a contingent payment debt instrument in two steps. How do i file my 2009 taxes online Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. How do i file my 2009 taxes online Use the comparable yield as the yield to maturity. How do i file my 2009 taxes online In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). How do i file my 2009 taxes online Do not treat any amount payable as qualified stated interest. How do i file my 2009 taxes online Adjust the OID in (1) to account for actual contingent payments. How do i file my 2009 taxes online If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. How do i file my 2009 taxes online If the contingent payment is less than the projected fixed amount, you have a negative adjustment. How do i file my 2009 taxes online Net positive adjustment. How do i file my 2009 taxes online   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. How do i file my 2009 taxes online Treat a net positive adjustment as additional OID for the tax year. How do i file my 2009 taxes online Net negative adjustment. How do i file my 2009 taxes online   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. How do i file my 2009 taxes online Use a net negative adjustment to offset OID on the debt instrument for the tax year. How do i file my 2009 taxes online If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. How do i file my 2009 taxes online However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. How do i file my 2009 taxes online You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. How do i file my 2009 taxes online Basis adjustments. How do i file my 2009 taxes online   In general, increase your basis in a contingent payment debt instrument by the OID included in income. How do i file my 2009 taxes online Your basis, however, is not affected by any negative or positive adjustments. How do i file my 2009 taxes online Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. How do i file my 2009 taxes online Treatment of gain or loss on sale or exchange. How do i file my 2009 taxes online   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. How do i file my 2009 taxes online If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. How do i file my 2009 taxes online If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. How do i file my 2009 taxes online See Regulations section 1. How do i file my 2009 taxes online 1275-4 for exceptions to these rules. How do i file my 2009 taxes online Premium, acquisition premium, and market discount. How do i file my 2009 taxes online   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. How do i file my 2009 taxes online See Regulations section 1. How do i file my 2009 taxes online 1275-4 to determine how to account for these items. How do i file my 2009 taxes online Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. How do i file my 2009 taxes online An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d
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The How Do I File My 2009 Taxes Online

How do i file my 2009 taxes online It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors. How do i file my 2009 taxes online Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. How do i file my 2009 taxes online Select the Scenario that Applies to You: How do i file my 2009 taxes online I am an independent contractor or in business for myself How do i file my 2009 taxes online If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center. How do i file my 2009 taxes online I hire or contract with individuals to provide services to my business How do i file my 2009 taxes online If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are. How do i file my 2009 taxes online Determining Whether the Individuals Providing Services are Employees or Independent Contractors How do i file my 2009 taxes online Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be - How do i file my 2009 taxes online An independent contractor How do i file my 2009 taxes online An employee (common-law employee) How do i file my 2009 taxes online A statutory employee How do i file my 2009 taxes online A statutory nonemployee How do i file my 2009 taxes online In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered. How do i file my 2009 taxes online Common Law Rules How do i file my 2009 taxes online Facts that provide evidence of the degree of control and independence fall into three categories: How do i file my 2009 taxes online Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? How do i file my 2009 taxes online Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) How do i file my 2009 taxes online Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? How do i file my 2009 taxes online Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. How do i file my 2009 taxes online The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination. How do i file my 2009 taxes online Form SS-8 How do i file my 2009 taxes online If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status. How do i file my 2009 taxes online Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).