Translating “is doing” or “are doing” something.

Question

Sometimes I hear, for instance, “I am dancing”, as estoy bailando.  Other times I hear, bailo.  I’ve had both marked incorrect in different instances.  So what is normally spoken?  It is confusing.

Answer

Hola Kathleen
Both tenses are correct, one is the simple present "bailo" and the other the progressive/continuous present "estoy bailando". The general use of the progressive one is to express an action that "is happening" at the time of speaking, the same as in English:

María está bailando mucho esta noche. 
María is dancing a lot tonight.

(action in progress, she is dancing now)

María siempre baila mucho en la discoteca. 
María always dances a lot at the disco.

(action that takes place regularly, every time she goes to the disco, but she is not dancing right now.)
Beware that the actions in the present don't always translate with exactly the same tense in English and Spanish, so you may have the simple present in one but using the progressive tense in the other because those are the most natural translations in specific cases. If you encounter this in one of our test-questions, there will be a hint in the question indicating which tense we want you to use in the answer, e.g.: Conjugate in El Presente". When we just say "El Presente", this means the "simple" present, not the continous. I imagine this is the reason why you have the perception of having been marked incorrect. 
I hope this clarified it.
Saludos