Category: Business News
The US Internal Revenue Service (IRS) has announced the annual inflation adjustments for tax year 2027. The announcement came on 5 November 2026 in Revenue Procedure 2026-35 (release IR-2026-133), covering nearly 70 tax provisions. Bracket thresholds rise about 3.2%, while the seven tax rates stay unchanged.
These figures apply to income earned in 2027, on returns filed in 2028. They are not the figures for the return due in April 2027, which still uses the 2026 amounts.
The standard deduction for 2027
| Filing status | 2027 standard deduction | Change from 2026 |
|---|---|---|
| Single | $16,600 | Up $500 from $16,100 |
| Married filing jointly | $33,200 | Up $1,000 from $32,200 |
| Married filing separately | $16,600 | Up $500 |
| Head of household | $24,925 | Up $775 from $24,150 |
The 2027 tax brackets
The seven rates remain 10%, 12%, 22%, 24%, 32%, 35% and 37%. Only the income thresholds move. The table shows the taxable income above which each rate starts.
| Tax rate | Single | Married filing jointly |
|---|---|---|
| 10% | Up to $12,800 | Up to $25,600 |
| 12% | Above $12,800 | Above $25,600 |
| 22% | Above $52,025 | Above $104,050 |
| 24% | Above $109,125 | Above $218,250 |
| 32% | Above $208,325 | Above $416,650 |
| 35% | Above $264,550 | Above $529,100 |
| 37% | Above $661,375 | Above $793,650 |
Other figures that changed
- Child tax credit: maximum $2,300 per child, up from $2,200 in 2026; the refundable portion rises to $1,800, up from $1,700.
- Health savings accounts: $4,500 for self-only coverage and $9,000 for family coverage.
- Estate tax exclusion: $15,480,000.
- Annual gift tax exclusion: $20,000 per recipient ($40,000 for couples splitting gifts).
- Alternative minimum tax exemption: $93,000 for unmarried individuals and $144,700 for married couples filing jointly.
- Earned income tax credit: maximum $8,496 for taxpayers with three or more qualifying children.
- Personal exemption: remains $0.
What is still not announced
The 2027 limits for 401(k) and IRA retirement plans have not been published by the IRS. A figure of $25,500 for the 401(k) limit is only a projection based on the September inflation data — it is not an announced limit, and the IRS notice is expected in mid-November. Do not treat it as final.
Sources: IRS, Revenue Procedure 2026-35, 5 November 2026; KPMG; Journal of Accountancy, 5 November 2026; The College Investor.
