The IRS recently released the federal tax brackets and other inflation-adjusted amounts for the 2027 tax year. While the seven individual income tax rates remain the same at 10%, 12%, 22%, 24%, 32%, 35% and 37%, the income ranges within each bracket have increased.
These changes apply to income earned in 2027 and will generally affect tax returns filed in 2028.
The annual adjustments are designed to account for inflation, so taxpayers aren’t pushed into higher tax brackets simply because their income increases with the cost of living. The new amounts are also important for tax planning, particularly when reviewing estimated tax payments, withholding and year-end strategies.
2027 Federal Income Tax Brackets
| Tax Rate | Single | Married Filing Jointly |
| 10% | $0 – $12,800 | $0 – $25,600 |
| 12% | $12,801 – $52,025 | $25,601 – $104,050 |
| 22% | $52,026 – $109,125 | $104,051 – $218,250 |
| 24% | $109,126 – $208,325 | $218,251 – $416,650 |
| 32% | $208,326 – $264,550 | $416,651 – $529,100 |
| 35% | $264,551 – $661,375 | $529,101 – $793,650 |
| 37% | Over $661,375 | Over $793,650 |
One important point: moving into a higher tax bracket does not mean all of your income is taxed at the higher rate. The federal income tax system uses marginal tax rates, meaning only the portion of taxable income that falls within each bracket is taxed at that rate.
Standard Deduction Increases for 2027
The standard deduction is also increasing for 2027:
- Married Filing Jointly: $33,200
- Single / Married Filing Separately: $16,600
- Head of Household: $24,925
Other Key Changes for 2027
The IRS made inflation adjustments to nearly 70 tax provisions. A few other updates worth noting include:
- The Child Tax Credit increases to $2,300, with up to $1,800 potentially refundable.
- The Alternative Minimum Tax (AMT) exemption increases to $93,000 for unmarried individuals and $144,700 for married couples filing jointly. The phaseout begins at $515,950 and $1,031,900, respectively.
- The foreign earned income exclusion increases to $137,300.
What This Means for Tax Planning
Even though the tax rates themselves aren’t changing, the higher income thresholds can still affect a taxpayer’s overall tax picture.
This is particularly relevant for individuals with business income, investment income, capital gains, bonuses, stock compensation or other income that can fluctuate from year to year. As 2027 approaches, taxpayers should consider whether their withholding and estimated tax payments still make sense based on their expected income.
For business owners and higher-income individuals, it can also be helpful to review projected income, capital gains and losses, retirement contributions, charitable giving and other planning opportunities before year-end. Waiting until the tax return is being prepared can mean some planning opportunities are no longer available.
Looking Ahead
The new 2027 tax brackets and inflation adjustments give taxpayers another reason to revisit their tax situation before the start of the new year. The impact will be different for everyone depending on income, filing status and other circumstances, but understanding the new thresholds can help taxpayers plan ahead and avoid surprises.
The 2027 amounts were released by the IRS in Revenue Procedure 2026-35 and generally apply to income earned during 2027 and tax returns filed in 2028.
