The IRS has announced the tax year 2027 annual inflation adjustments and tax brackets. The following information from the IRS outlines the new brackets:
- Standard Deduction. For tax year 2027, the standard deduction increases to $33,200 for married couples filing jointly, up $1,000 from 2026. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,600 for tax year 2027, and for heads of households, the standard deduction will be $24,925.
- Marginal Rates: For tax year 2027, the top tax rate remains 37% for individual single taxpayers with incomes greater than $661,375 ($793,650 for married couples filing jointly). The other rates are:
35% for incomes over $264,550 ($529,100 for married couples filing jointly);
32% for incomes over $208,325 ($416,650 for married couples filing jointly);
24% for incomes over $109,125 ($218,250 for married couples filing jointly);
22% for incomes over $52,025 ($104,050 for married couples filing jointly);
12% for incomes over $12,800 ($25,600 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $12,800 or less ($25,600 for married couples filing jointly).
For more information on other adjustments and exemptions, click here to visit the posting from the IRS on this matter.