Bible Money Matters

Christian personal finance

Menu
    • About
    • Archives
    • Contact
    • Close
  • Making Money
      • Popular Articles

        • 50 Ways To Make Money: Maximizing, Creating And Increasing Your Income
        • 10 Weird And Unconventional Ways To Make Money
        • Making Money With A Blog (e-Book)
        • 10 Places To Sell Or Trade Your Unused (Or Broken) Electronics
        • Ways To Make Extra Money Series: 20 More Income Generating Ideas From Our Readers
        • Making Side Income Can Help Blunt The Impact Of Becoming A One Income Family
        • Earn Cash Back With Discover it® Credit Card
      • Recent Articles – Making Money

        • Best Sites Like Fiverr To Make Money As A Freelancer
        • 13 Of The Best Independent Contractor Jobs
        • 25 Of The Best Gig Economy Jobs
        • How To Make Money Blogging: Turn A Blog Into A Business
      • Categories

        • Making Money
        • Investing
        • Retirement
        • Jobs & Work LIfe
        • Money
        • Income
    • Close
  • Saving Money
      • Popular Articles

        • 50 Easy Ways To Save Money Every Month
        • 10 Weird And Unconventional Ways To Save Money
        • 10 Practical Ways To Save Money And Increase Your Net Worth
        • How To Save Money On Just About All Of Your Regular Monthly Bills
        • Ways To Watch TV Without Paying An Arm And A Leg For Cable TV
        • Save Money On Your Hospital Bill - Just By Asking
      • Recent Articles – Saving Money

        • Living Stingy: 13 Tips For Spending Less
        • How To Save $100k In 7 Practical Steps
        • Stairs App Review: Save And Invest To Earn 4-6% Interest
        • Honey Review: Save Money Automatically When You Shop Online
      • Categories

        • Saving Money
        • Frugality
        • Planning
        • Finance
        • Saving For Retirement
        • Savings Accounts
    • Close
  • Banking
      • Best Rates For 2019

        • Best Credit Cards
        • Best Savings Accounts
        • Best Mortgage Rates
        • Best CD Rates
        • Best Brokerages
        • Free Credit Scores
      • Recent Reviews

        • M1 Finance Review: Free Trading App And Automated Investing
        • Tablo 4th Gen Over-The-Air DVR Review: The Best Device For Cord Cutters
        • TradeStation Review: Commission Free Stock And ETF Trades
        • Firstrade Review: Commission Free Trades on Stocks, Crypto, And Options
      • Categories

        • Bank & Software Reviews
        • Investing
        • Credit
        • Banking
        • Mortgage
        • Insurance
        • Family Budget
    • Close
  • Recommended
  • Video
    • Close

Lending Club Income And Taxes

By Peter Anderson 7 Comments - The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited January 11, 2012.

Share
Pin3
Tweet19
Share4
26 Shares

Last week I talked about a new Lending Club video training course that was just launched by Peter Renton of Social Lending Network. The course goes in depth about how to make wise investing decisions when using Lending Club, and how you can optimize your holdings to get the best possible returns.

If you follow his advice to the T, I’m pretty sure that you’ll be seeing some good positive returns in your account.   If you do in fact make interest and fees in your account, one thing you’ll need to think about is how you’ll be paying taxes on that interest income when it comes to tax time. Remember, you DO have to pay taxes on those earnings!

I’ve been thinking about this lately as I have made more with my account this year than in previous years. Figuring out how much you’ll need to pay in taxes on those earnings can be confusing. So today I thought I’d look at Lending Club and taxes.

Quick Navigation

  • Lending Club: Is It Taxable Income?
  • How Will Interest Income Be Reported For Lending Club?
  • How To Report Interest Income From 1099-OID
  • How To Tabulate Net Earnings

Lending Club: Is It Taxable Income?

If you’re using Lending Club, the first question we need to ask is whether or not the interest income is taxable at all.  The easy answer is that yes, the income is in fact taxable.  Depending on when your loans in your account originated, you may be getting a 1099-INT or a 1099-OID to report it.  You may not be getting either of those forms – which is where this gets confusing.  We’ll go into which loan types and origination dates have which reporting forms in a moment.

To get started, however, you’re going to need a few things from your Lending Club account’s statements page.

  • Your monthly account statements
  • Your yearly account statements
  • Your tax statements

Lending Club Taxes

How Will Interest Income Be Reported For Lending Club?

Depending on when your loans originated you could be receiving either a 1099-INT or a 1099-OID.

  • If you’ve been investing for a while and your loan(s) originated prior to October 14, 2008, you will receive a 1099-INT if the total interest you earned in 2010 for all these loans was greater than $10.
  • If your loans originated after October 14, 2008 you will receive a 1099-OID (Original Issue Discount) to report interest income received on notes where the total interest on that note is in excess of $10.

Here’s where things can get confusing. If you have diversified your holdings across a variety of $25 loans like I have within your Lending Club account, you may not receive either a 1099-INT or 1099-OID at all as you may not have reached the $10 threshold on interest earned on that particular loan.  That, however, doesn’t mean that you shouldn’t be reporting that interest income.  Just that you won’t be getting a 1099 to give you a quick and easy number to report doesn’t mean the IRS won’t come after you if the unreported income comes to light.

How To Report Interest Income From 1099-OID

If you do in fact receive a 1099-OID, you’ll need to report that income on your taxes.

You can report it on Schedule B, Line 1. Want more details about reporting that income, you can find specific details in publication 1212. Page 6 has a section called “how to report”.

Once you get the 1099-OID you’ll want to reconcile the numbers on that form with your year end statement mentioned above to make sure they match.  If they don’t  (and they probably won’t if you invest in individual $25 loans like I do) you’ll need to add on any additional earnings to Schedule B that weren’t reported when you do your taxes.

How To Tabulate Net Earnings

So how do you tabulate your net earnings from your Lending Club account?  You need to take the total of your interest income (reported and non-reported) plus income from fees,  minus losses from charged off loans and minus the servicing fees.

  • Taxable earnings = Interest income + late fees – defaults or charge offs – servicing fees.

To figure out your taxable earnings you’ll just need your year end statement  to get the interest income, late fees and defaults.

The servicing fees, however, aren’t included on the year end statement. For that you’ll need to go to each of your monthly account statements (page 2) and get the servicing fees from there.  It would be nice if they reported that on the year end statement as well, but they currently don’t.

If you had charge-offs (which I don’t), I’ve read elsewhere that you can claim the capital loss on Schedule D by reporting it as a bad personal debt.  As with anything – verify this information for yourself before completing your taxes.

Haven’t Opened A Lending Club Account Yet? Do It Here.

Have you reported interest income on a Lending Club loan before? Tell us your experience in the comments.

Related Posts

  • Introduction To Peer-To-Peer Lending: Signing Up To Use Lending Club

    Peer to peer lending has been a hot topic on personal finance blogs for the last year or so. Lots of people are promoting it as…

  • Lending Club Investing Returns Above 10.5% As High Risk Loans Stay Current

    I'm currently making over 10.5% on the money I've invested with Lending Club. Here's my investing strategy, and why it may work for you as…

  • Lending Club Returns Still Above 11%. Lending Club #5 On Forbes Most Promising Companies List

    I've been investing in Lending Club for several years now, and over the years I've seen my returns go up and down. Despite a few…

Share
Pin3
Tweet19
Share4
26 Shares
Last Edited: 11th January 2012 The content of biblemoneymatters.com is for general information purposes only and does not constitute professional advice. Visitors to biblemoneymatters.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

This article is about: Investing, Taxes

About Peter Anderson

Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his 2 children. He loves reading and writing about personal finance, and also enjoys a good board game every now and again. You can find out more about him on the about page. Don't forget to say hi on Pinterest, Twitter or Facebook!

Comments

    Share Your Thoughts: Cancel reply

  1. Peter Renton says

    Peter, Great detail about taxes. We will all need to be thinking about that soon. The one thing I would emphasize is that it is quite likely your 1099-OID statement will not reflect your total interest earnings from Lending Club. It is tempting for many investors to just received that statement and put those numbers on your return. But that will likely lead to under reporting of your Lending Club earnings.

    Also, for the Prosper investors their 1099-OID includes interest earned from all loans (even those below $10) – not sure why both companies do it differently.

    Reply
    • Sun says

      > Also, for the Prosper investors their 1099-OID includes interest earned
      > from all loans (even those below $10) – not sure why both companies do it
      > differently.

      One of the main IRS office for California is down the street from Prosper? ;)

      Reply
      • Peter Renton says

        Funny. But Lending Club is now just four blocks away from Prosper in downtown San Francisco…

        Reply
  2. Daniel says

    This is one of the reasons I have a Roth IRA with lending club. I don’t know if I would want to deal with all the paperwork. With the roth, there really is none.

    Reply
  3. Haris says

    If you haven’t received any tax forms (1099 INT or OID) where do you report the interest income? Do you just fill a 1099 INT?

    Reply
  4. Peter Renton says

    Haris, It goes under Part I – Interest on your Schedule B (at least that is where my accountant puts it).

    Reply
  5. Eve says

    So my accountant last year placed the amount from 1099-oid box 1 from Lending Club on Schedule B. Then he did a subtotal and backed out that complete oid amount on a line labeled “OID Adjustment” to ultimately have a zero effect on my income tax. I have read up and down and in and out and can’t figure out why he zeroed out the effect of the oid amount. Publication is thoroughly confusing and that accountant won’t respond to my inquiries probably because we are not using him this year. Please help if you can.

    Reply
Previous Post: Amazon Kindle Fire Review: A Frugal Tablet Computer That Doesn’t Feel Frugal
Next Post: The Money Saving Mom’s Budget Book – A Review
Discover Investment Platforms

Popular Posts

  • 21 Easy Ways To Earn Free Amazon Gift Cards
  • 10 Best Free Tax Filing Services And Software Online
  • 21 Apps That Pay You Real Money Fast
  • 17 TV Apps And Live TV Streaming Services To Watch TV Free
  • 30 Legit Online Jobs That Pay Well
  • 37 Easy Ways To Get Free Gift Cards
  • How To Get Free Stock
  • 40 Easy Ways To Get Free Money Fast
  • 21 Places To Read Free Books Online
  • 24 Legit Online Jobs
  • 17 Best Work From Home Jobs: A List Of Legit Online Jobs That Pay Well

Recent Posts

  • A Eulogy And A Remembrance Of My Dad, Mark Lloyd Anderson
  • Why Do We Celebrate Our Independence On The Fourth Of July?
  • Enjoy Your Memorial Day But Let’s Remember Those Who Gave The Ultimate Sacrifice
  • 25 Bible Verses For A Happy New Year!
  • Merry Christmas To One And All: The Original Christmas Story
  • 401k Contribution Limits And Rules
  • Traditional And Roth IRA Contribution Limits Announced
  • M1 Finance Review: Free Trading App And Automated Investing
  • Tablo 4th Gen Over-The-Air DVR Review: The Best Device For Cord Cutters
  • Living Stingy: 13 Tips For Spending Less

Disclaimer

The information contained in BibleMoneyMatters.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation.

In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.

Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.

Amazon and the Amazon logo are trademarks of Amazon.com, Inc. or its affiliates.

We respect your privacy: Privacy Policy.

Thanks for visiting!

Bible Money Matters - Seen On These Sites and more..
Bible Money Matters is a personal finance, entrepreneurship and investing community. Give more, save more and live more.

Copyright © 2025 · Bible Money Matters | Sitemap | Advertise | Privacy Policy