IRS announces new federal income tax brackets for 2027
The IRS has announced higher federal income tax brackets and standard deductions for 2027. Here's what taxpayers need to know.
Key points
- The IRS raised income thresholds for all seven federal tax brackets for tax year 2027, with returns filed in 2028.
- The top 37% rate applies to individuals above $661,375 and married couples filing jointly at $793,650 or more.
- The standard deduction rises to $33,200 for joint filers and $16,600 for single filers in 2027.
The IRS announced new federal income tax brackets and standard deductions for 2027 on Thursday, raising the income thresholds for each bracket. The changes apply to tax year 2027, with returns filed in 2028.
The agency also increased figures for other provisions, including long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit.
Top rate and standard deduction
For 2027, the top rate of 37% applies to individuals with taxable income above $661,375 and to married couples filing jointly earning $793,650 or more. The system has seven income tiers, with rates from 10% to 37%, applied to each band of income rather than as a flat percentage.
The standard deduction rises to $33,200 for married couples filing jointly, up from $32,200 in 2026. Single filers can claim $16,600, up from $16,100.
The U.S. federal income tax system is progressive, which means tax rates increase as earnings rise.
— CNBC
How the adjustments work
The IRS adjusts the income ranges for each tax rate every year based on the consumer price index. Brackets depend on filing status, which can be single, married filing jointly, married filing separately, head of household or qualifying surviving spouse.
The announcement comes as Americans deal with affordability concerns over housing, groceries, gasoline and other living expenses. The consumer price index rose 3.7% in September 2026 from a year earlier, up from 3.4% in August, the Bureau of Labor Statistics reported in October.
