The Internal Revenue Service on Thursday announced its annual inflation adjustments for tax year 2027, raising the standard deduction and the income thresholds for all seven federal tax brackets. The changes apply to income earned in 2027 and will show up on the tax returns Americans file in early 2028.
For 2027, the standard deduction rises to $33,200 for married couples filing jointly, up $1,000 from 2026, and to $16,600 for single filers, up $500. Heads of household will be able to claim $24,925, a $775 increase. The IRS set the year's inflation adjustments at 3.2 percent, larger than the previous two years as inflation heated up.
The seven marginal tax rates — 10, 12, 22, 24, 32, 35 and 37 percent — are unchanged. What moves are the income windows where each rate applies. The top rate of 37 percent will apply to taxable income above $661,375 for individual filers and above $793,650 for married couples filing jointly.
The 35 percent rate starts at $264,550 for individuals and $529,100 for joint filers; the 32 percent rate at $208,325 and $416,650; the 24 percent rate at $109,125 and $218,250; the 22 percent rate at $52,025 and $104,050; and the 12 percent rate at $12,800 and $25,600. Income up to $12,800 for singles and $25,600 for joint filers is taxed at 10 percent.
The adjustments, published in Revenue Procedure 2026-35, cover nearly 70 tax provisions, including increases to the child tax credit. The IRS is required by law to publish the inflation-adjusted tables each year, and the figures are based on the chained consumer price index. For most taxpayers, the higher thresholds mean a little less of their income is taxed at higher rates — a modest break that reflects the higher cost of living, not a change in tax policy.
