Financial Counseling Certification Program (FiCEP) Practice Exam

The statement that members do not need to update their income tax withholding after separating from a spouse is true as it reflects the nature of tax withholding. When individuals separate from a spouse, they may not be required to immediately update their withholding unless their financial situation changes significantly or they choose to adjust their withholding status. However, it is often advisable to assess the withholding status following such changes in personal circumstances. While the law does not enforce an immediate update, individuals should consider their new tax situation, especially if they expect variations in income or eligibility for deductions. Not doing so could lead to either owing taxes or over-withholding. The incorrect options suggest conditions under which updates would be mandatory. For example, while having dependents may influence tax calculations, it does not impose a requirement to revise withholding simply due to separation. Similarly, changing jobs does not automatically necessitate an update unless the individual's financial circumstances warrant it or they choose to make a change for tax planning purposes.