Bloomberg Tax forecasts 3.2% rise in 2027 federal tax brackets

Bloomberg Tax released a forecast indicating that the Internal Revenue Service’s inflation-adjusted federal tax brackets are expected to rise roughly 3.2% for the 2027 tax year, compared with a 2.7% increase for the current year. The projection uses the chained Consumer Price Index, the same measure the IRS applies, but substitutes an 11-month average because the Department of Labor did not publish October 2025 inflation data after a government shutdown.

The anticipated adjustments would lift the income thresholds for all seven brackets, helping to prevent "bracket creep" where taxpayers move into higher brackets despite unchanged purchasing power. For married couples, the 12% bracket would span $25,601 to $104,050, with the upper limit $3,250 higher than in 2026. Single filers would see similar bracket increases.

The standard deduction is also projected to rise to $33,200 for married couples filing jointly and $16,600 for single filers, up from $31,500 and $15,750 respectively.

"Without annual inflation adjustments, workers who get a cost-of-living pay increase could be pushed into a higher tax bracket even though their standard of living hasn't changed," the analysis notes.

The IRS has not yet announced the official 2027 brackets, which it typically releases in October or November, and did not respond to inquiries about the timing of its announcement.