IRS Raises Long-Term Capital Gains Brackets and Standard Deductions for 2027

The Internal Revenue Service released new tax tables on Thursday that raise the income limits for long-term capital gains rates beginning in 2027. The agency also adjusted several other provisions, including the federal income-tax brackets, the estate and gift-tax exemption and the earned income tax credit eligibility thresholds.

Under the updated rules, the 0% capital-gains rate will apply to single filers with taxable income up to $51,050 and to married couples filing jointly with taxable income up to $102,100. Taxpayers whose income exceeds those amounts will be subject to the 15% or 20% rates, depending on their bracket.

The standard deduction is set to increase to $16,600 for single filers, up from $16,100, and to $33,200 for married couples filing jointly, up from $32,200. Taxable income is calculated by subtracting the greater of the standard or itemized deductions from adjusted gross income.

The changes could influence investors’ decisions on asset sales or portfolio rebalancing in 2027, as capital-gains taxes are triggered when investments in brokerage accounts are sold.