Question

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

Answer 1

c

Answer 2

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.

Answer 3

I was thinking it was b tho

Answer 4

nope. 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.

Answer 5

and that's considered income.

Answer 6

income is not tax deductable

Answer 7

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