IRS raises 2027 federal income tax brackets and standard deductions
The agency increased income thresholds for all seven brackets and lifted the standard deduction, with the top 37% rate starting above $661,375 for individuals.
At a glance
- The IRS raised income thresholds for all seven 2027 federal tax brackets, with rates from 10% to 37%.
- The top 37% rate applies to individual taxable income above $661,375 and married couples filing jointly at $793,650 or more.
- The standard deduction rises to $33,200 for married couples filing jointly and $16,600 for single filers in 2027.
The Internal Revenue Service announced new federal income tax brackets and standard deductions for tax year 2027 on Thursday, raising income thresholds across all seven tiers and adjusting several other provisions. The changes apply to returns filed in 2028.
The top rate of 37% will apply to individuals with taxable income above $661,375 and to married couples filing jointly with income of $793,650 or more. The IRS also increased long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among other items.
Standard deduction rises
The standard deduction will rise to $33,200 for married couples filing jointly, up from $32,200 in 2026. Single filers can claim $16,600, an increase from $16,100.
The federal income tax system is progressive, with seven income tiers and rates from 10% to 37%. Each rate applies to a band of income rather than to all earnings at a flat percentage. The IRS adjusts the income ranges for each rate every year based on the consumer price index.
Taxpayers calculate taxable income by subtracting the greater of their standard or itemized deductions from adjusted gross income. Filing status—single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse—determines which brackets apply. For 2025 taxable income, taxpayers can find the figure on line 15 of Form 1040.
The announcement comes as Americans face affordability pressures from housing, groceries, gasoline and other living costs. The consumer price index rose 3.7% in September 2026 from a year earlier, up from 3.4% in August, according to the Bureau of Labor Statistics in October.
Source: CNBC Top News.
Questions and answers
- What are the 2027 federal income tax brackets?
- The IRS set seven brackets for tax year 2027, with rates from 10% to 37%. The top 37% rate applies to individuals with taxable income above $661,375 and married couples filing jointly earning $793,650 or more.
- How much is the standard deduction for 2027?
- The standard deduction is $33,200 for married couples filing jointly, up from $32,200 in 2026, and $16,600 for single filers, up from $16,100.
- When do the 2027 tax brackets apply?
- They apply to tax year 2027, for returns filed in 2028. The IRS adjusts bracket thresholds yearly based on the consumer price index.
