The IRS has released its yearly inflation adjustments for 2027, and for most households the news is good. Tax brackets are getting wider and the standard deduction is going up. That means more of your income is protected from tax, even if your pay rises next year.
These changes cover almost 70 parts of the tax code. They apply to income you earn in 2027, which you’ll report on the tax return you file in early 2028.
The New Standard Deduction
Most Americans take the standard deduction instead of itemizing, so this is the number that matters most. For 2027 it will be:
- Single filers and married filing separately: $16,600 (up $500)
- Head of household: $24,925 (up $775)
- Married filing jointly: $33,200 (up $1,000)
The 2027 Tax Brackets
The seven tax rates themselves aren’t changing. They’re still 10%, 12%, 22%, 24%, 32%, 35% and 37%. What’s changing is the amount of income you can earn before you move into the next bracket. On average, the cut-off points are rising by about 3.2%.
Single filers:
- 10%: up to $12,800
- 12%: over $12,800
- 22%: over $52,025
- 24%: over $109,125
- 32%: over $208,325
- 35%: over $264,550
- 37%: over $661,375
Married filing jointly:
- 10%: up to $25,600
- 12%: over $25,600
- 22%: over $104,050
- 24%: over $218,250
- 32%: over $416,650
- 35%: over $529,100
- 37%: over $793,650
Why This Matters, Even If You Get a Raise
Without these adjustments, a cost-of-living raise could push part of your income into a higher bracket. You’d pay more tax even though your money doesn’t stretch any further. This is often called “bracket creep,” and the yearly inflation update is meant to stop it.
Other Numbers Worth Knowing
- Child Tax Credit: up $100 to a maximum of $2,300 per child, with up to $1,800 of that refundable
- Earned Income Tax Credit: up to $8,496 for families with three or more qualifying children
- Annual gift exclusion: $20,000 per person
- Health FSA limit: $3,500, with up to $700 carried over where your plan allows it
- Estate tax exclusion: $15.48 million for people who die in 2027
- Personal exemptions: still zero
What You Can Do Now
Nothing changes on this year’s tax return. These figures are for 2027 income, so you’ll see them when you file in 2028.
It’s still worth looking at your paycheck withholding early in the new year. A bigger standard deduction can mean you’re having more tax taken out than you need to. If you get a big refund every spring, that’s money you could be keeping in your pocket every month instead.
Jackson is a dedicated USA news writer, who covers important topics such as Social Security payment schedules, COLA increases, IRS tax refunds, stimulus payment announcements, Medicare eligibility, retirement benefits, and changes to state driving laws. His goal is to provide clear, informative, and easy-to-follow articles that help retirees, seniors, taxpayers, and American families stay informed.