IRS Unveils 2027 Federal Income Tax Brackets and Higher Standard Deductions

The Internal Revenue Service on Thursday announced new federal income tax brackets and standard deductions for 2027, adjusting the thresholds that determine how much Americans owe on their earnings.

The changes apply to tax year 2027, meaning they will govern returns that taxpayers file in 2028. The agency raised the income thresholds for each bracket and also updated figures for other key provisions, including long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit.

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

The seven brackets for 2027 are as follows: 37% for incomes over $661,375, or $793,650 for married couples filing jointly; 35% for incomes over $264,550, or $529,100 jointly; 32% for incomes over $208,325, or $416,650 jointly; 24% for incomes over $109,125, or $218,250 jointly; 22% for incomes over $52,025, or $104,050 jointly; 12% for incomes over $12,800, or $25,600 jointly; and 10% for incomes of $12,800 or less, or $25,600 jointly.

The standard deduction is also going up. Married couples filing jointly will be able to claim $33,200 in 2027, compared with $32,200 in 2026. Single filers can claim $16,600 starting in 2027, up from $16,100.

Federal income tax brackets determine how much is owed on each portion of taxable income, which is calculated by subtracting the greater of the standard or itemized deduction from adjusted gross income. Because the U.S. system is progressive, rates rise as earnings increase, and each rate applies only to the band of income within its range rather than to all earnings at once.

The IRS adjusts the income ranges for each rate every year based on the consumer price index. The latest announcement arrives as Americans continue to grapple with affordability pressures tied to the rising cost of housing, groceries, gasoline and other living expenses.

The consumer price index climbed 3.7% in September 2026 from a year earlier, accelerating from a yearly pace of 3.4% in August, the Bureau of Labor Statistics reported in October.

Which brackets apply to a given taxpayer depends on filing status, which is selected on the tax return. The options are single, married filing jointly, married filing separately, head of household and qualifying surviving spouse. Taxpayers can locate their 2025 taxable income on line 15 of Form 1040, the individual federal income tax return.