The IRS announced its federal tax inflation adjustments for tax year 2027 on November 5, 2026. These figures generally apply to 2027 income and federal returns filed in 2028—not the 2026 returns filed in 2027.
2027 STANDARD DEDUCTION
• Single: $16,600
• Married filing jointly: $33,200
• Head of household: $24,925
• Married filing separately: $16,600
The joint-filer amount is $1,000 higher than in 2026. A standard deduction reduces taxable income; it does not reduce a tax bill dollar for dollar or guarantee a larger refund.
2027 TAX BRACKETS
For single taxpayers, the 2027 marginal rates begin at these taxable-income thresholds: 10% up to $12,800; 12% above $12,800; 22% above $52,025; 24% above $109,125; 32% above $208,325; 35% above $264,550; and 37% above $661,375. Brackets for married joint filers differ. Moving into a higher bracket does not mean all taxable income is taxed at that higher rate.
OTHER NOTABLE CHANGES
• Child Tax Credit: maximum $2,300 per qualifying child, with up to $1,800 refundable, subject to eligibility and phase-out rules.
• Earned Income Tax Credit: maximum $8,496 for qualifying taxpayers with at least three qualifying children.
• Health FSA: $3,500 salary-reduction limit for plan years beginning in 2027; qualifying plans may allow up to $700 carryover.
• Section 179: maximum expensing amount $2,640,000, subject to applicable limitations. It is not a universal write-off for every business purchase.
• Annual gift-tax exclusion: $20,000 per recipient in 2027.
WHAT TO REVIEW
Keep 2026 and 2027 rules separate. Review withholding and estimated payments when income or family circumstances change. Business owners should project profit and cash flow before making large purchases or changing employee benefits. Accurate bookkeeping and supporting records make these decisions easier.
For a tax or bookkeeping inquiry: https://financewithnyeem.com/start
OFFICIAL SOURCES
IRS, November 5, 2026 announcement: https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2027-taxpayers-continue-to-benefit-from-the-working-families-tax-cuts
Revenue Procedure 2026-35: https://www.irs.gov/pub/irs-drop/rp-26-35.pdf
General educational information, not individualized tax advice. Eligibility and tax results depend on individual circumstances and subsequent guidance.
