IRS releases 2027 federal income tax brackets and deduction updates

The Internal Revenue Service on Thursday issued the federal income-tax brackets that will apply for the 2027 tax year, adjusting the income thresholds for inflation. For single filers, the 10% bracket now applies to income up to $12,800, while married couples filing jointly see the same rate up to $25,600. The 12% rate begins above those amounts, and the higher brackets rise to 22% at $52,025 (single) and $104,050 (joint), 24% at $109,125 and $218,250, 32% at $208,325 and $416,650, 35% at $264,550 and $529,100, and 37% at $661,375 and $793,650 respectively.

The standard deduction, which benefits roughly nine-in-ten taxpayers, will increase to $33,200 for married couples filing jointly, $16,600 for single filers and married individuals filing separately, and $24,925 for heads of household.

The child tax credit is set to rise by $100 to $2,300 per child, with the refundable portion climbing to $1,800. Additionally, the annual gift-tax exclusion will be raised to $20,000, up from $19,000 in 2026.