The adjustments for the 2027 tax year were established after the Bureau of Labor Statistics reported a 3.7% annual increase in the consumer price index in September 2026. Under the new rules, the top 37% tax rate will apply to individual earnings above $661,375 and married joint incomes of at least $793,650. Standard deductions are also slated to expand for both individual taxpayers and married couples filing jointly. Beyond baseline brackets, the agency raised limits across several other provisions, including long-term capital gains and the estate and gift tax exemption.
Key points
The updated brackets and deduction amounts will take effect for tax returns that are file…: The updated brackets and deduction amounts will take effect for tax returns that are filed in 2028.
Wealthier earners will face the highest marginal rate of 37% only after crossing adjusted…: Wealthier earners will face the highest marginal rate of 37% only after crossing adjusted income thresholds above $661,375 individually.
Taxpayers qualifying for the earned income tax credit and capital gains treatments will s…: Taxpayers qualifying for the earned income tax credit and capital gains treatments will see their respective eligibility thresholds increase.
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The IRS has announced new federal income tax brackets and standard deductions for 2027.
In its announcement Thursday, the agency raised the income thresholds for each bracket, which apply to tax year 2027 for returns filed in 2028.
The IRS also increased figures for other key provisions, including long-term capital gains brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among others.
For 2027, the top rate of 37% applies to individuals with taxable income above $661,375 and married couples filing jointly earning $793,650 or more.
Here are the federal income tax brackets for 2027:
- 37%: for incomes over $661,375 ($793,650 for married couples filing jointly)
- 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)
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