The changes reflect the IRS’s annual inflation adjustments to federal tax rules, affecting income thresholds, deductions, and several tax credits. According to The Washington Post, the higher standard deduction will allow single taxpayers to shield an additional $500 from taxation compared with 2026, while married couples filing jointly will receive a combined increase of $1,000.
New IRS Tax Brackets and Standard Deductions for 2027
The standard deduction will rise to $33,200 for married couples filing jointly and $24,925 for taxpayers filing as heads of household. For single filers, the deduction increases to $16,600, up from $16,100 in 2026.
Most taxpayers claim the standard deduction rather than itemizing expenses, making the annual adjustment relevant to a large share of federal income tax returns.
According to FOX Business, the IRS has also revised the income thresholds across all seven federal income tax brackets, while retaining the existing marginal rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
For single filers, the lowest tax rate of 10% applies to taxable income of $12,800 or less. The 12% bracket covers income above $12,800 through $52,025, while the 22% rate applies to income above $52,025 through $109,125.
The 24% bracket extends from income above $109,125 through $208,325, followed by the 32% bracket through $264,550. The 35% rate applies to income above $264,550 through $661,375, with the highest rate of 37% applying to amounts exceeding $661,375.
For married couples filing jointly, the 10% bracket ends at $25,600. The 12% rate applies to income above that amount through $104,050, while the 22% bracket extends through $218,250. The highest 37% rate begins on income exceeding $793,650.
Child Tax Credit Increases Alongside Estate and Gift Tax Limits
Families will also see adjustments to federal tax credits in 2027. The maximum child tax credit will increase by $100 to $2,300 per qualifying child, while the refundable portion will rise to $1,800.
According to FOX Business, the maximum Earned Income Tax Credit for eligible taxpayers with three or more qualifying children will reach $8,496, compared with $8,231 in 2026.
The tax credit for qualified adoption expenses will increase from $17,670 to $18,250, with a refundable amount of $5,280 available in 2027.
Changes will also affect estate and gift taxes. The annual gift tax exclusion will rise from $19,000 to $20,000, while the exclusion for gifts to a spouse who is not a U.S. citizen will increase from $194,000 to $201,000.
For estates of individuals who die in 2027, the basic estate tax exclusion will increase to $15.48 million, compared with $15 million in 2026.
IRS CEO Frank Bisignano said the revisions would provide increased tax benefits to American individuals and businesses, including higher deductions, family tax credits, and expanded business expensing allowances.
These revised thresholds will govern the 2027 tax year, with the corresponding federal income tax returns due to be filed in 2028.
