IRS raises 2027 tax brackets and standard deduction to match inflation
The IRS announced higher income thresholds for all seven federal tax brackets and an increased standard deduction for 2027, while tax rates remain unchanged.
The Internal Revenue Service released the 2027 federal income-tax brackets, moving each bracket’s income thresholds upward to reflect inflation. All seven brackets will have higher limits, but the tax rates themselves stay the same.
For 2027, the top 37% rate will apply to incomes above $661,375 for single filers and $793,650 for married couples filing jointly. The 35% bracket begins at $264,550 (or $529,100 jointly), 32% at $208,325 (or $416,650), 24% at $109,125 (or $218,250), 22% at $52,025 (or $104,050), 12% at $12,800 (or $25,600), and 10% applies to income at or below $12,800 (or $25,600 for joint filers).
The standard deduction also rises, to $33,200 for married couples filing jointly, up from $32,200 in 2026, and to $16,600 for single filers, up from $16,100. About nine in ten taxpayers use the standard deduction, according to tax professionals.
The agency adjusted the lifetime gift and estate tax exemption as well, increasing it to $15.48 million per individual in 2027, up from $15 million in 2026. A married couple could therefore shield up to $30.96 million from federal estate tax, though state death taxes may still apply.
Tax professionals note that the higher thresholds allow many earners to keep more of their income within the same rates, provided they stay below the new bracket limits when filing their 2027 returns in early 2028.