Taxes and Medical Bills....Please Help?

She can itemize and deduct the medical expenses if they were unreimbursed, and she actually paid them this year. She'd have to reduce the total by 7.5% of her AGI, but that still leaves enough to itemize. On an income of $28,000 she'd probably still owe tax, but not as much as if she didn't itemize, and some of the $2000 she had withheld would likely be refunded to her. If she doesn't itemize, she'd likely have to pay when she files rather than getting a refund.

Unless she has a child of hers who lives with her that you didn't mention, she wouldn't be eligible for any credit that would give back more than was paid in. That's possible for very low income adults without children, but her income is way over the limit for that.

Don't get too excited yet that she "only paid $300 more to federal taxes" - it's possible that she'll owe more when she files her return. If her disability payments weren't taxable (that can go either way depending on circumstances) then she's probably OK.

It is possible for a taxpayer to get more back as a refund than they paid in taxes. However it appears that this does not apply to your girlfriend.

Unless she qualifies for a refundable credit (seems not so), the most she can get back is the amount she already paid.

If she itemizes (uses Schedule A), she can deduct the medical expenses she paid (not paid by insurance or a third party). This may reduce taxes that she owed.

If she paid her disability insurance premiums with after-tax dollars (this is how it is usually done), then when she receives payments from the insurance, it is not taxed. This may or may not be what is happening. Whether her disability payments were taxed can be determined by looking at her W-2.

She may be able to use the medical bills to itemize and get her taxable income down lower. Basically take 7.5% of her AGI, any amount above that number would go towards itemizing. She would also be able to deduct any state taxes paid as well as charity donations. If those numbers added up to more than 5350 than it would help her.

Any period of disability would not be taxable income...those who are on permanent Social Security disability are not required for that reason to even file income tax.

But, your girlfriend should be able to use all those medical expenses as deductions! (If she actually paid out 12k....NOT if she just has that much in bills sitting around)