The Internal Revenue Service released its inflation-adjusted figures for the 2027 tax year on November 5, 2026. While the marginal rates remain unchanged—from 10 % at the bottom to 37 % at the top—the income thresholds that trigger each bracket have been nudged upward by roughly 3.2 %. For single filers, the 10 % bracket now covers the first $12,800 of taxable income, and the ceiling for the 37 % bracket moves to $660,375. Married couples filing jointly see a parallel shift, with the top rate applying to incomes above $793,650.
New income-tax brackets for 2027
Below is a snapshot of the revised schedule. The 12 % bracket begins at $12,801 for singles and $25,601 for joint filers; the 22 % tier starts at $52,026 and $104,051 respectively; the 24 % range covers $109,126 through $208,325 for singles and $218,251 through $416,650 for couples; the 32 % band runs from $208,326 to $264,550 (or $416,651 to $529,100); and the 35 % bracket applies to earnings between $264,551 and $660,375 for individuals and $529,101 to $793,650 for married groups. Because each rate only taxes the income inside its window, most taxpayers will see an effective rate well below the headline 37 %.
Standard deduction and family-oriented credits
The standard deduction for 2027 climbs to $16,600 for single filers and $33,200 for married couples filing jointly, a $500 and $1,000 increase respectively over 2026. Heads of household receive $24,925. The personal exemption stays at zero, a change cemented by the Working Families Tax Cuts. Meanwhile, the child tax credit rises to $2,300 per qualifying child, with $1,800 of that amount refundable. The Earned Income Tax Credit for families with three or more children reaches a maximum of $8,496, up from $8,231.
Gift-tax, 529 plans and other indexed limits
Inflation indexing also lifts the annual gift-tax exclusion to $20,000 per recipient, allowing parents or grandparents to place that amount into a 529 college-savings account without filing a gift-tax return. A married couple can therefore contribute $40,000 per child in a single year, or $200,000 under the five-year “superfunding” rule. The lifetime estate and gift exemption expands to $15,480,000 per individual. Health-flexible spending accounts (FSAs) gain a $3,500 contribution ceiling, with a $700 carry-over allowance for plans that permit it, while the monthly transit-and-parking benefit rises to $350.
Practical impact on tax bills
Because the adjustments are primarily inflationary, the dollar-for-dollar tax burden on unchanged wages is modest. Illustrative scenarios show a single taxpayer earning $60,000 would pay $68 less under the new tables, while a married couple with two children and $120,000 of income would save $336. The real advantage appears when salaries increase in line with the 3.2 % bracket shifts, preventing a jump into a higher marginal rate.
Taxpayers filing their 2026 returns in spring 2027 must still use the 2026 brackets and deductions; the 2027 figures apply only to income earned between January 1 and December 31, 2027 and to returns filed in 2028. Workers should review their Form W-4 after the new year, especially after life-event changes, and consider electing the higher FSA limits during open enrollment.
