Key 2027 Tax Updates: What Taxpayers Should Know

Recent legislative developments include Florida voters overwhelmingly approving property tax relief, while California voters rejected a proposed billionaire tax.

The IRS recently released updated tax brackets and deduction thresholds for the 2027 tax year, which will directly impact taxpayers when they file next year.

Each year, the IRS adjusts these thresholds to account for inflation. Consequently, the revised figures apply to the income earned during the 2027 tax year, which Americans will report on their returns filed in 2028.

“American individuals and businesses will see increased tax benefits for the next tax year, spanning from an increase in the standard deduction and the Child Tax Credit for families, to a boost in the amount that can be expensed by businesses,” said IRS CEO Frank Bisignano.

For those who claim the standard deduction—which the majority of taxpayers do not itemize—the threshold will rise significantly in 2027. Single filers will receive a $16,600 standard deduction, married couples filing jointly will benefit from a $33,200 deduction, and heads of households will have a $24,925 deduction available.

People review tax forms on a laptop computer. (iStock / iStock)

Adjustments were also made to the IRS tax brackets concerning the income thresholds that determine each rate.

Below is a look at the tax brackets and rates that will apply in 2027:

• 37% for incomes over $661,375 for individuals or $793,650 for married couples filing jointly;
• 35% for incomes over $264,550 for individuals or $529,100 for married couples filing jointly;
• 32% for incomes over $208,325 for individuals or $416,650 for married couples filing jointly;
• 24% for incomes over $109,125 for individuals or $218,250 for married couples filing jointly;
• 22% for incomes over $52,025 for individuals or $104,050 for married couples filing jointly;
• 12% for incomes over $12,800 for individuals or $25,600 for married couples filing jointly;
• 10% for incomes of $12,800 or less for individuals or $25,600 or less for married couples filing jointly.

IRS CEO and Social Security Commissioner Frank Bisignano said the revisions will provide more support for Americans. (Tierney L. Cross)

The IRS also increased the maximum amount of the child tax credit to $2,300 in 2027, a $100 increase from the previous year. Furthermore, the amount of the credit that is refundable has also risen by $100 to $1,800.

The annual exclusion for taxes on gifts will reach $20,000 in 2027, up from $19,000 in the 2026 calendar year. Additionally, for gifts given to a spouse who is not a U.S. citizen, the limit increases to $201,000 in 2027, up from $194,000 previously.

President Donald Trump’s One Big Beautiful Bill Act was signed into law in 2025 and extended tax provisions that were due to expire while providing other tax relief. (Samuel Corum/Getty Images)

Qualifying taxpayers who have three or more qualifying children and can claim the Earned Income Tax Credit (EITC) will see the maximum credit rise to $8,496 in 2027 – up from $8,231 a year ago.

Credits for qualified adoption expenses will also increase, reaching $18,250 in 2027 from $17,670 the prior year. The refundable portion of this credit will be $5,280.

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