What is Federal IOD tax?

Question

I'm being charged this on my money market account; can someone explain to me what this is is and y am I being taxed?

Answer 1

If Boston is right, why not go ahead now and choose him as Best Answer.  Don't let your question expire and let the rest of the community choose him.

Also, for our edification, is it really 'iod'?  Did they say what 'iod' stood for?

Answer 2

Check with your account administrators.

It sounds like you are *not* in the US, despite posting on a US board.

Answer 3

No such animal that I'm aware of.  Are you in the US?

The only thing that I can think of is that you're subject to backup withholding, either by order of the IRS or because you failed to provide your SSN to the account custodian.

Answer 4

Are you sure you don't mean OID instead of IOD.  OID means "Original Issue Discount" and is an amount you paid under par value for a bond - or your money market did and passed it on to you.  You are essentially being taxed on the gain you made by them buying under par.