Washington —The Internal Revenue Service on Thursday, Nov. 5, published its tax year 2027 inflation adjustments, raising the standard deduction to $33,200 for married couples filing jointly and the estate tax basic exclusion to $15.48 million. Income tax bracket thresholds rise by about 3.2 percent across the board, while the top rate stays at 37 percent.

The adjustments cover almost 70 provisions and are set out in Revenue Procedure 2026-35. They generally apply to tax returns filed in 2028, not the filing season that opens early next year. The IRS framed the release around the Working Families Tax Cuts, the name it now uses for the 2025 tax law that its release a year ago called the One, Big, Beautiful Bill.

“Hardworking American taxpayers will continue to benefit from the Working Families Tax Cuts (WFTC) and will see WFTC credits and deductions increase with this adjustment.”

Frank J. Bisignano, IRS chief executive officer

What are the 2027 federal income tax brackets?

The seven rates are unchanged. The income levels where each rate starts are higher. For single filers, the 2027 thresholds are:

  • 10 percent: taxable income of $12,800 or less ($25,600 for married couples filing jointly)
  • 12 percent: over $12,800 ($25,600 joint), up from $12,400 ($24,800) in 2026
  • 22 percent: over $52,025 ($104,050 joint), up from $50,400 ($100,800)
  • 24 percent: over $109,125 ($218,250 joint), up from $105,700 ($211,400)
  • 32 percent: over $208,325 ($416,650 joint), up from $201,775 ($403,550)
  • 35 percent: over $264,550 ($529,100 joint), up from $256,225 ($512,450)
  • 37 percent: over $661,375 ($793,650 joint), up from $640,600 ($768,700)

If your income rises by less than about 3.2 percent, more of it will generally fall into lower brackets than in 2026. If it rises by more, part of the gain may move into a higher bracket.

How much is the 2027 standard deduction?

  • Married couples filing jointly: $33,200, up $1,000 from $32,200
  • Single filers and married individuals filing separately: $16,600, up from $16,100
  • Heads of household: $24,925, up from $24,150

Personal exemptions remain at zero. The IRS noted that this does not include the separate senior deduction created by the new law. Taxpayers in the 37 percent bracket also face a limit on the tax benefit from itemized deductions.

What are the 2027 capital gains brackets?

According to CNBC’s summary of the IRS figures, single filers with taxable income up to $51,050, and married couples filing jointly with up to $102,100, will pay a 0 percent rate on long-term capital gains in 2027. The 15 percent rate applies up to $563,200 for single filers and $633,600 for joint filers, and the 20 percent rate applies above those levels. Long-term gains are profits on assets held for more than one year. The full thresholds are in the tables of Revenue Procedure 2026-35.

How do the 2027 gift and estate tax limits change?

For people who die during 2027, estates have a basic exclusion amount of $15,480,000, up from $15,000,000 in 2026. The annual gift exclusion rises to $20,000 per recipient, from $19,000, meaning the first $20,000 given to any one person during 2027 does not count toward taxable gifts. For gifts to a spouse who is not a U.S. citizen, the annual exclusion rises to $201,000, up from $194,000.

Which other 2027 tax limits are rising?

  • Child tax credit: maximum $2,300, up $100, with up to $1,800 refundable
  • Alternative minimum tax exemption: $93,000 for unmarried individuals, phasing out from $515,950; $144,700 for joint filers, phasing out from $1,031,900
  • Earned income tax credit: maximum $8,496 for filers with three or more qualifying children, up from $8,231
  • Health flexible spending accounts: $3,500 salary-reduction limit, with a maximum carryover of $700
  • Qualified transportation and parking benefits: $350 a month, up $10
  • Adoption credit: up to $18,250 of qualified expenses, with $5,280 refundable
  • Foreign earned income exclusion: $137,300, up from $132,900
  • Section 179 expensing for businesses: up to $2,640,000, up from $2,560,000

Some items are not indexed. The Lifetime Learning Credit still phases out for modified adjusted gross income between $80,000 and $90,000, or $160,000 and $180,000 for joint returns. The IRS said that range has not been adjusted for inflation for tax years beginning after Dec. 31, 2020.

Consumer price inflation reached 4% in September

Consumer price index, % change from a year earlier; October 2025 not available

2%3%4%5%Jan 25Dec 25Sep 26

Source: Bureau of Labor Statistics via FRED

The new thresholds arrive as consumer prices are rising faster. Prices in September were 4.02 percent higher than a year earlier, according to Bureau of Labor Statistics data published by FRED, and the annual rate has been at or above 3.5 percent every month since April.

What should taxpayers do with the 2027 numbers now?

  1. Use the right year. The 2026 figures, including the $32,200 joint standard deduction, apply to the returns most people file in 2027. The new numbers apply to income earned in 2027.
  2. Plan gifts around the new exclusion. The $20,000 annual exclusion per recipient takes effect for gifts made in calendar 2027. Gifts made in 2026 fall under the $19,000 limit.
  3. Check where your income sits relative to the brackets. Households near a bracket threshold, or near the 0 percent capital gains ceiling, can use the new figures to think about when to take income or sell assets.
  4. Revisit workplace benefit elections. The health FSA limit of $3,500 applies to plan years beginning in 2027, and transit and parking benefits rise to $350 a month.
  5. Business owners planning equipment purchases should note the higher section 179 limit of $2,640,000.

Revenue Procedure 2026-35 contains the full tables, including earned income credit thresholds and phase-outs for each family size.