IRS Raises 2027 Tax Brackets and Standard Deductions

The Internal Revenue Service announced inflation adjustments for the 2027 tax year, which will apply to returns filed in 2028. Detailed in Revenue Procedure 2026-35, the agency raised income thresholds for all seven federal income tax brackets. The top 37% rate now applies to single filers earning over $661,375 and married couples filing jointly earning $793,650 or more.

Standard deductions increased to $16,600 for single filers and $33,200 for married couples filing jointly. The agency also raised the maximum Child Tax Credit to $2,300 and the annual gift exclusion to $20,000. The federal estate and gift tax exemption rose to $15.48 million per person, up from $15 million in 2026. These exemption levels were established by legislation passed under Donald Trump; without that action, the exemption would have reverted to 2017 levels of $5 million plus inflation after 2025.

IRS Chief Executive Officer Frank J. Bisignano stated that the adjustments will provide increased tax benefits for families and businesses. The agency based these changes on the consumer price index to address rising living expenses for gasoline, groceries, and housing.