What filing status should William and Kathleen use since they legally separated on December 15, 2011?

William and Kathleen should use the "Married Filing Separately" status for their tax return because legal separation, as of December 15, 2011, indicates that they were still legally married for most of the tax year, which extends until December 31. If they maintained separation but did not finalize a divorce by the end of the tax year, the law allows them to choose to file separately, despite being separated.

Choosing this status means that each spouse must report their own income, exemptions, and deductions. Filing as "Married Filing Jointly" would not be appropriate since they are no longer living together as a married couple. The "Single" status is not applicable because they are still legally married. Lastly, "Head of Household" is only available to unmarried individuals who support dependents, which would not apply to William and Kathleen given their married status in the eyes of the law at the end of the year.