IRS Raises 2027 Tax Brackets and Standard Deductions

The Internal Revenue Service has raised federal income-tax brackets and standard deductions for tax year 2027, adjusting thresholds for inflation while leaving the seven tax rates unchanged. The changes apply to income earned in 2027, which most taxpayers will report on returns filed in 2028. The standard deduction will be $16,600 for single filers, up $500 from 2026, and $33,200 for married couples filing jointly, an increase of $1,000. Heads of household will be able to claim $24,925, according to the IRS figures reported in the announcement. The federal tax system has seven rates, from 10% to 37%. For 2027, the top rate will apply to taxable income above $661,375 for single filers and above $793,650 for couples filing jointly. The thresholds for the lower rates also rise. For example, the 22% bracket begins above $52,025 for single filers and $104,050 for joint filers; the 24% bracket begins above $109,125 and $218,250, respectively. The adjustments change the income ranges taxed at each rate, not the rates themselves. Federal income tax is calculated progressively, so the rate for a bracket applies to the portion of taxable income within it, rather than to all income....