From CNBC · Kate Dore, CFP®, EA · · 1m 40s
IRS raises tax brackets for 2027 to adjust for inflation
The IRS has announced higher federal income tax brackets and standard deductions for 2027, with the top rate of 37% now applying to higher incomes.
In brief
The IRS has announced higher federal income tax brackets and standard deductions for 2027, with the top rate of 37% now applying to higher incomes. The IRS raised federal income tax brackets for 2027 to account for inflation, increasing standard deductions and adjusting income thresholds across all seven tax rates…
IRS announces 2027 tax bracket changes
The IRS announced Thursday that it has raised federal income tax brackets for tax year 2027, adjusting income thresholds for each bracket to account for inflation.
Top rate now applies at higher income levels
The top federal tax rate of 37% now applies to individuals earning over $661,375 and married couples filing jointly earning $793,650 or more in 2027.
All seven tax brackets adjusted upward
The IRS raised income thresholds across all seven federal tax brackets, ranging from 10% to 37%, with each rate applying to specific bands of income rather than a flat percentage.
Standard deduction increases for all filers
The standard deduction rises to $33,200 for married couples filing jointly, up from $32,200 in 2026. Single filers can claim $16,600, up from $16,100.
Other provisions also adjusted for inflation
The IRS also increased figures for long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit among other key provisions.
Adjustments come amid affordability concerns
The bracket adjustments come as Americans face rising costs for housing, groceries, gasoline and other living expenses. The consumer price index climbed 3.7% in September 2026 from one year earlier.
The takeaway
The IRS raised federal income tax brackets for 2027 to account for inflation, increasing standard deductions and adjusting income thresholds across all seven tax rates.
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