This is a really simple, dumb question, yet I can't find the answer anywhere. This is the first year where my taxes are going to actually be complicated (LC, other investments, a few different jobs) and I'm confused about the income tax I have to pay on LC interest.
I know LC won't send me a tax form because all my notes are $25 and I won't hit the $10 mark on any of them. So I'm planning on reporting it myself, but what if I am just re-investing 100% of the interest I have earned? Do I still need to pay income tax on it? Wouldn't this cause a bunch of confusion down the road and potentially cause me to have to pay income tax on it TWICE? I've got some people telling me I only need to pay income tax on what I withdraw from LC, and some people saying I need to pay it on any interest/fees I've earned.
Can someone clear up this newbie question for me?
Thanks!