Key Points
- The IRS raised all seven federal income tax brackets for 2027, and the 37% rate now starts above $661,375 for single filers and $793,650 for married couples filing jointly.
- The 2027 standard deduction rises to $16,600 for single filers and $33,200 for married couples, while the child tax credit climbs to $2,300 per child.
- These numbers apply to income earned in 2027 and the tax return filed in 2028, not the return due in April 2027.
The IRS released its 2027 tax brackets on November 5, 2026, raising the income limits for every federal tax bracket and the standard deduction for every filing status. The tax rates stay at 10% through 37%, but more of each paycheck now lands in the lower brackets.
The IRS announcement covers almost 70 provisions, and the full tables sit in Revenue Procedure 2026-35. You can compare every figure below with the 2026 federal tax brackets.
The new figures apply to income earned from January 1 through December 31, 2027, and to returns filed in 2028. The return you file this coming spring still uses the 2026 standard deduction and brackets. Retirement account limits will be announced soon, since the IRS announces 401(k) contribution limits separately each November.
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What Are The 2027 Federal Income Tax Brackets?
The 2027 bracket thresholds rose about 3.2% from 2026. Single filers pay 10% on their first $12,800 of taxable income, up from $12,400. Married couples filing jointly pay 10% on their first $25,600.
You can estimate your own bill with our income tax calculator.
| Tax Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 – $12,800 | $0 – $25,600 |
| 12% | $12,801 – $52,025 | $25,601 – $104,050 |
| 22% | $52,026 – $109,125 | $104,051 – $218,250 |
| 24% | $109,126 – $208,325 | $218,251 – $416,650 |
| 32% | $208,326 – $264,550 | $416,651 – $529,100 |
| 35% | $264,551 – $661,375 | $529,101 – $793,650 |
| 37% | $661,376+ | $793,651+ |
The top 37% rate applies above $661,375 for single filers and $793,650 for married couples filing jointly. A bracket only applies to the income inside it, which is why your effective tax rate runs well below your top rate.
Short-term capital gains are taxed at these same rates, while long-term gains use separate 0%, 15% and 20% capital gains brackets.
How Much Is The 2027 Standard Deduction?
The 2027 standard deduction is $16,600 for single filers and married individuals filing separately, $33,200 for married couples filing jointly and $24,925 for heads of household. That’s $500 more for single filers and $1,000 more for joint filers than in 2026. Most households take the standard deduction because it beats their itemized deductions.
The personal exemption stays at $0 for 2027. The One Big Beautiful Bill Act made that permanent. Filers 65 and older can still claim the separate $6,000 senior deduction through 2028, which isn’t part of this adjustment.
What Other Tax Breaks Change For Families In 2027?
The child tax credit rises to $2,300 per child in 2027, up $100 from 2026. Up to $1,800 of it is refundable. Working families with three or more children can claim an Earned Income Tax Credit of up to $8,496, up from $8,231.
| Tax Item | 2026 | 2027 |
|---|---|---|
| Standard Deduction (Married Filing Jointly) | $32,200 | $33,200 |
| Standard Deduction (Single) | $16,100 | $16,600 |
| Standard Deduction (Head Of Household) | $24,150 | $24,925 |
| Child Tax Credit (Per Child) | $2,200 | $2,300 |
| Refundable Child Tax Credit | $1,700 | $1,800 |
| Maximum Earned Income Tax Credit | $8,231 | $8,496 |
| Annual Gift Tax Exclusion | $19,000 | $20,000 |
| Estate Tax Exclusion | $15,000,000 | $15,480,000 |
| Health FSA Contribution Limit | $3,400 | $3,500 |
| Transit And Parking Benefit (Monthly) | $340 | $350 |
| Maximum Adoption Credit | $17,670 | $18,250 |
Workplace benefits rise too. Employees can put $3,500 into a health FSA, and plans that allow carryovers can roll over up to $700. The monthly limit for transit passes and parking rises to $350. Pre-tax benefits like these also lower your adjusted gross income, which can cut your payment on an income-driven repayment plan.
Adoptive parents can claim a credit on up to $18,250 of qualified adoption expenses, and up to $5,280 of that credit is refundable. That sits alongside the family tax credits we track each year, which now rise with inflation.
What Does The 2027 Gift Tax Exclusion Mean For 529 Plans?
The annual gift tax exclusion rises to $20,000 per recipient in 2027, up from $19,000. Most families treat that number as the 529 plan contribution limit, so a parent or grandparent can put $20,000 into each child’s account without filing a gift tax return. A married couple can give $40,000 per child.
Five-year superfunding lets one contributor put up to $100,000 into a 529 plan in 2027 and spread it over five years for gift tax purposes. Married couples can superfund $200,000 per child, a big lever for grandparents helping pay for college.
The lifetime estate and gift tax exclusion rises to $15,480,000 per person, so very few families will ever owe federal gift tax.
How Much Will The 2027 Tax Changes Save You?
Inflation adjustments keep your taxes from rising when your pay only keeps up with prices, so the savings at the same income are small. We ran four households through the 2026 and 2027 rules with identical wages in both years, using the standard deduction and the child tax credit for kids under 17. A married couple earning $120,000 with two children would owe $336 less in 2027.
| Household | 2026 Federal Tax | 2027 Federal Tax | Savings |
|---|---|---|---|
| Single, $60,000 | $5,020 | $4,952 | $68 |
| Single, $100,000 | $13,170 | $12,890 | $280 |
| Married, $120,000, Two Kids | $5,640 | $5,304 | $336 |
| Married, $200,000 | $26,340 | $25,779 | $561 |
A single filer earning $60,000 saves just $68, so don’t budget around a tax cut. The real benefit shows up when you get a raise of about 3.2%, because that raise won’t push more of your income into a higher bracket.
You can run your own numbers in our income tax calculator.
What Isn’t Changing For 2027?
The Lifetime Learning Credit still phases out between $80,000 and $90,000 of modified adjusted gross income, or $160,000 to $180,000 for joint filers. Congress stopped indexing those limits after 2020, so the credit shrinks in real value each year. Families paying tuition should compare it with the other tax breaks for tuition and student loans.
The 2027 401(k) and IRA limits haven’t been released yet. Last year the IRS published them on November 13. The 2027 HSA limits are already announced at $4,500 for self-only coverage and $9,000 for family coverage, per our HSA contribution limits page.
What Should You Do Now?
- File your 2026 return with 2026 numbers. The return due in April 2027 uses the 2026 tax brackets, not these new figures.
- Check your withholding in January. Review your first 2027 paycheck and update your Form W-4 if you married, had a baby or changed jobs.
- Set your FSA election during open enrollment. Choose up to the new $3,500 limit only if you’ll spend it, since most of a health FSA balance is use-it-or-lose-it.
- Plan 529 gifts at $20,000 per child. Starting January 1, 2027, parents and grandparents can gift money to a 529 plan at the higher exclusion.
- Watch for the 2027 retirement limits. We’ll update our 401(k) and income limits page as soon as the IRS releases them.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.