Which of these people will be eligible for a tax deduction?

a. Gareth, who gets interest income from banks

b. Nancy, who gets dividends from stocks and mutual funds

c. Miles, who makes cash contributions to charities

Interest from banks and dividends are both forms of income, which is taxed. But when you give to charities, you can actually * deduct * it from your taxes.

Let's say you have a stock that gives dividends. That means every month, or six months, etc (depending on the type of dividend) you get paid a certain amount. Sort of like a salary for having the stock.

"tax deductible" means that it can be * deducted * from your amount of taxes owed.