I've been filing single for a while, and I live with my parents. My parents are retired, and they receive Social Security, as well as some investment/dividend income. My parents have been filing "married filing jointly."
Can I file head of household and claim them as dependents, so it's a household of 3? I'm taking classes at a college, and I'd like to qualify for FAFSA, CA Promise Grant, etc. I already have a bachelors degree. I currently don't qualify for FAFSA or CA Promise Grant because my income isn't low enough, as someone filing single.
Are there pros and cons to filing single, or as head of household, with my parents as dependents?
You cannot claim your parents as dependents unless you provide more than 50% of their upkeep. Since they have their own income and file their own returns it is not likely that you qualify. You also could not claim Head of Household status. Keep filing. the way you have been.
If they are filing married joint return, they are already claiming themselves. You cannot claim them (no one can be claimed twice). You live with them but are not supporting them.
There are tax benefits to claiming parents as dependents and as qualifying you for Head of Household filing status, but you can only claim your parents as dependents if you meet the test for a qualifying relative per Table 5 from IRS Publication 501 at this link. The gross income test and support test must be met. They also cannot have already filed a joint return for this year claiming their own standard deduction.
To meet the gross income test, each dependent's gross income for the year must be less than $4,400. Gross income is all income in the form of money, property, and services that isn't exempt from tax, including all taxable unemployment compensation, taxable social security benefits, and certain amounts received as scholarship and fellowship grants.
To meet the support test, you must generally provide more than half of each person's total support during the calendar year. You figure whether you have provided more than half of a person's total support by comparing the amount you contributed to that person's support with the entire amount of support that person received from all sources. This includes support the person provided from the person’s own funds.
You may be able to file as head of household if you meet all the following requirements:
See also this article from TurboTax for more information on qualified dependents.
You could get a larger standard deduction by filing as Head of Household, and could claim the Other Dependent Credit for your parents, but only if you qualify.