IRS Releases Updated Federal Income Tax Brackets and Standard Deductions for 2027

The IRS has announced new federal income tax brackets and standard deductions for the 2027 tax year.

In its Thursday announcement, the agency raised the income thresholds for each bracket, which will apply to tax year 2027 and returns filed in 2028.

The IRS also increased key provisions, including long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among others.

For 2027, the top marginal rate of 37% applies to individuals with taxable income above $661,375 and married couples filing jointly earning $793,650 or more.

The standard deduction will increase to $33,200 for married couples filing jointly, up from $32,200 in 2026. Single filers can claim $16,600, a rise from $16,100.

The new brackets arrive as Americans confront affordability challenges amid rising housing, grocery, and fuel costs.

The consumer price index rose 3.7% in September 2026 compared with a year earlier, per the Bureau of Labor Statistics.

How tax brackets function

The U.S. federal income tax system is progressive, meaning tax rates increase as earnings rise.

For 2027, the federal brackets comprise seven income tiers with rates ranging from 10% to 37%. The tax applies to each band of income rather than a flat percentage for all earnings.

The IRS adjusts income ranges annually using the consumer price index.

Understanding your tax bracket

Your federal tax brackets depend on your filing status, which you select on your tax return. Options include single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse.

Your 2025 taxable income can be found on line 15 of your individual federal income tax return, Form 1040.

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