The Internal Revenue Service has released updated tax brackets and deduction thresholds that will apply to income earned during the 2027 tax year and reported on returns filed in 2028, the agency said. The changes include higher standard deductions, an increased child tax credit, and adjusted income thresholds across the individual tax brackets.
“American individuals and businesses will see increased tax benefits next tax year ranging from an increase in the standard deduction and the Child Tax Credit for families, and a boost to the amount that can be expensed by businesses,” IRS CEO Frank Bisignano said in announcing the revisions.
The IRS said the standard deduction — claimed by the majority of taxpayers who do not itemize — will rise for 2027 to:
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- $16,600 for single filers;
- $33,200 for married couples filing jointly;
- $24,925 for heads of household.
As part of its annual inflation adjustments, the IRS also moved the income thresholds that determine which tax rate applies. According to the IRS, the 2027 tax brackets and thresholds will be:
- 37% for incomes over $661,375 for individuals or $793,650 for married couples filing jointly;
- 35% for incomes over $264,550 for individuals or $529,100 for married couples filing jointly;
- 32% for incomes over $208,325 for individuals or $416,650 for married couples filing jointly;
- 24% for incomes over $109,125 for individuals or $218,250 for married couples filing jointly;
- 22% for incomes over $52,025 for individuals or $104,050 for married couples filing jointly;
- 12% for incomes over $12,800 for individuals or $25,600 for married couples filing jointly;
- 10% for incomes of $12,800 or less for individuals or $25,600 or less for married couples filing jointly.
The IRS also raised several credits and exclusions for 2027. The child tax credit increases to $2,300, up $100 from the prior year, and the refundable portion of that credit rises by $100 to $1,800, the agency said. The annual exclusion for gifts will rise to $20,000 (from $19,000 in 2026), and the limit for gifts to a spouse who is not a U.S. citizen increases to $201,000 (up from $194,000).
Other notable adjustments announced by the IRS include a higher estate tax exclusion and larger refundable credits: the basic estate tax exclusion for decedents who die in 2027 is $15,480,000 (up from $15 million in 2026); the maximum Earned Income Tax Credit (EITC) for taxpayers with three or more qualifying children rises to $8,496 (from $8,231); and the credit for qualified adoption expenses increases to $18,250 with a refundable portion of $5,280, the agency said.
The IRS emphasized that these annual inflation-based changes determine the amounts taxpayers will use when preparing 2027 returns to be filed in 2028. The agency and its CEO framed the adjustments as providing broader tax benefits for individuals, families and businesses next tax year.
