IRS raises 2027 federal tax brackets and standard deductions for taxpayers

IRS raises 2027 federal tax brackets and standard deductions for taxpayers

The Internal Revenue Service has announced new federal income tax brackets and standard deductions for 2027, raising the income thresholds for each bracket while keeping tax rates unchanged. The top rate of 37 percent will apply to single filers with taxable income above 661,375 dollars, and to married couples filing jointly earning 793,650 dollars or more. The standard deduction will rise to 16,600 dollars for single filers, up from 16,100 dollars, and to 33,200 dollars for married couples filing jointly, up from 32,200 dollars in 2026. The IRS also increased the lifetime gift and estate tax exemption to 15.48 million dollars per person, up from 15 million dollars. The adjustments reflect inflation, with the consumer price index rising 3.7 percent in September 2026 from a year earlier. The federal system has seven tiers, with rates ranging from 10 percent to 37 percent, and the IRS adjusts the ranges each year based on the consumer price index. These changes apply to tax year 2027, meaning returns will be filed in early 2028.