Head of Houshold?

What is the name of your state? OH

I am a full-time student, I recieved around 6500 in loans and 5500 in grants last year. I recieved about 4200 in unemployment insurance payments. I also made around 2500 doing odd jobs for which I was paid cash. I have a 6 month old daughter who was born in June. I live in my parent's basement and pay them rent. Should I file at all? If I do file can I claim head of household? I am confused on the part about paying for than half to maintian the home. I do not pay more than half for the entire house, but I do not live in the entire house either. I consider the basement to be an apartment for which I rent and pay 100% of the cost to live there since it has it's own kitchen and bathroom and it's own entrance. What is the legal definition of an apartment?

You must file because you were self-employed & made over $400. You can file HH, but probably don't need to. A separate apt has a separate kitchen and phone line (usually). It helps if you're paying something close to fair market rent. The easiest way to do this would be to file using a PO Box or by adding an 'A' to your street address so the IRS doesn't see a MFJ couple & a HH person at the same address.

You can include your grants in income on line 7 (write "SCH $5500" on the dots to the left, claim the cash on a Schedule C-EZ, & list the unemployment on its line. The loans are not income. Then you use the child tax credit & education credits to pay any income taxes & use the EIC to pay the self-employment taxes. You must claim your expenses on the Sch C-EZ, even though doing so will reduce your EIC. Meeting the separate household test is necessary to allow you to claim EIC for your daughter. If you aren't in a separate household, then you are a qualifying child for your parent & you cannot claim EIC at all.