IRS Raises 2027 Tax Bracket Thresholds About 3%, Rates Stay at 10% to 37%

The IRS on Thursday, Nov. 5, released its annual inflation adjustments for tax year 2027, covering nearly 70 provisions in Revenue Procedure 2026-35. The seven income tax rates stay at 10%, 12%, 22%, 24%, 32%, 35% and 37%. What moves is how much income falls into each bracket.

The figures apply to income earned in 2027 and to returns filed in early 2028.

The new brackets and deductions

The standard deduction rises to $16,600 for single filers, up from $16,100. Married couples filing jointly get $33,200, up from $32,200. Heads of household get $24,925.

For single filers, the brackets now run:

• 10%: up to $12,800
• 12%: up to $52,025
• 22%: up to $109,125
• 24%: up to $208,325
• 32%: up to $264,550
• 35%: up to $661,375
• 37%: above $661,375

For joint filers, the 10% bracket tops out at $25,600 and the 12% at $104,050. The 22% bracket ends at $218,250, the 24% at $416,450, the 32% at $529,100 and the 35% at $793,650. The 37% rate applies above $793,650.

The increases land between roughly 3.1% and 3.3%. The single standard deduction rose 3.1%, and the top of the 10% bracket rose 3.2%, from $12,400 to $12,800. The IRS indexes to chained CPI, which generally runs a bit below the headline inflation number, so brackets climb slightly slower than they would under the older measure.

Indexing is not a tax cut. It only keeps a raise that matches inflation from pushing a worker into a higher bracket.

Capital gains, credits and estates

For long-term capital gains, single filers with taxable income of $51,050 or less and joint filers at $102,100 or less pay 0%. Above those lines the rate is 15%, then 20% at higher incomes.

Other 2027 figures from the revenue procedure:

• Child Tax Credit: $2,300 per child, up $100. The refundable portion is $1,800, also up $100.
• Estate tax exclusion: $15,480,000, up from $15,000,000 for 2026.
• Annual gift exclusion: $20,000, up from $19,000.
• Section 179 expensing limit: $2,640,000, up from $2,560,000.
• Kiddie tax threshold: $1,400.
• Additional standard deduction for age 65 or older, or blind: $1,700 per qualifying condition.
• Alternative minimum tax exemption for unmarried filers: $93,000, phasing out at $515,950.

IRS CEO Frank Bisignano said taxpayers "will see WFTC credits and deductions increase with this adjustment." WFTC is the Republican rebrand of the One Big Beautiful Bill Act, signed by President Donald Trump in July 2025. Bisignano pointed to the larger standard deduction, the Child Tax Credit and a higher business expensing limit.

Treasury also names Opportunity Zones

The Treasury Department separately announced new Opportunity Zone designations on Thursday. All 6,576 nominated census tracts were designated, and 2,594 of them are rural. The designations take effect Jan. 1, 2027, and last ten years.

The 2025 law made the program permanent and added enhanced incentives for rural areas. Investors get deferred tax on capital gains, and a full exemption from capital gains tax on profits from investments held at least ten years.

Treasury Secretary Scott Bessent said the designations "will help direct private investment to communities that stand to benefit most." Treasury says more than $110 billion in private investment has flowed into the zones since the 2017 creation of the program.

Congress could change the math

The revenue procedure itself carries a caveat. It states the figures reflect the tax code as in effect on its release date, and that if amendments for 2027 are enacted later, taxpayers "should consult additional guidance."

Tuesday's midterms make that caveat relevant. The Daily Wire reported that Democrats won control of both chambers of Congress. Democrats have pushed several proposals that would change the numbers above, though none has become law.

Sen. Cory Booker's Keep Your Pay Act would lift the standard deduction to $37,500 for singles and $75,000 for joint filers. It would raise the Child Tax Credit to $4,320 for children under 6 and $3,600 for ages 6 to 17. It would also raise the top two rates from 35% and 37% to 41% and 43%.

Sen. Chris Van Hollen has proposed an extra 10-percentage-point tax on income above $1 million for individuals and $2 million for couples. His proposal covers wages, capital gains and dividends. Sens. Chuck Schumer, Ron Wyden and Elizabeth Warren have proposed raising the stock buyback tax from 1% to 4%.

Democrats frame their agenda as relief for lower-income families, paid for by higher taxes on wealthy people, businesses and investors. Republicans, including Bisignano in his statement, point to the existing tax cuts as the benefit working families should keep.

The Booker figures are pegged to 2026 thresholds. Any of these bills would still need Trump's signature or enough votes to override a veto, and he remains in the White House. Whether any Democratic tax measure reaches his desk before the 2027 figures take effect is unresolved.