Western Governors University (WGU) ACCT3630 C237 Taxation I Practice Exam

Married Filing Separately is the correct filing status that allows married individuals to file their taxes separately from one another. This option is specifically designed for couples who choose not to combine their incomes on a single tax return. There are various reasons why a couple might opt for this status, such as wanting to limit their liability for each other's tax obligations, or due to differing financial situations that might lead to a more favorable tax outcome when filing separately.

Choosing this status has specific tax implications, such as limitations on certain deductions and credits that may not apply when filing this way. For example, couples filing separately cannot take advantage of certain credits that are available to those filing jointly, which can affect their overall tax liability. However, despite these limitations, it can still be beneficial for some couples depending on their circumstances.

Other filing statuses mentioned do not pertain to married individuals filing separately. Single filing is for individuals who are not married, while head of household is typically employed by single taxpayers with dependents. Married Filing Jointly, on the other hand, would require both spouses to file a single return that combines their income, so it doesn't apply in this case.