IRS 2027 Tax Brackets Could Leave Americans With More Take-Home Income

The IRS has unveiled new federal tax brackets for 2027, a change that could leave many Americans with more money to keep. The update arrives as households continue to face higher costs for food, housing and other everyday essentials.

Married couples filing jointly will have a standard deduction of $33,200, while single filers will be able to deduct $16,600. Both figures are higher than the 2026 amounts.

The agency is also increasing the income thresholds for federal tax brackets, allowing workers to earn more before part of their income is taxed at a higher rate.

Families with children may benefit as well, since the maximum child tax credit will rise to $2,300 for each qualifying child. The changes apply to earnings in 2027, with tax returns filed in 2028.

Standard Deduction Increases

In the IRS announcement released in early November, the standard deduction for married couples filing jointly was raised by $1,000, from $32,200 to $33,200.

For single taxpayers, the deduction will climb by $500, from $16,100 to $16,600. Those filing as head of household will be eligible for a $24,925 deduction.

The standard deduction is the portion of income taxpayers can subtract before calculating federal income tax.

For instance, a single filer making $50,000 who claims the new standard deduction would have $33,400 left subject to tax, before other adjustments. That does not mean the taxpayer receives a $16,600 refund.

Brackets Move Higher

Federal income tax rates will still range from 10% to 37%, but the income levels tied to each rate are changing.

For single filers, the 10% bracket will apply to the first $12,800 of taxable income in 2027. Income above that amount, up to $52,025, will be taxed at 12%.

For married couples filing jointly, the 10% rate will cover the first $25,600, while the 12% rate will apply to income above that figure up to $104,050.

Taxpayers with higher incomes will also see adjustments. The top 37% rate will start above $661,375 for single filers and above $793,650 for married couples filing jointly.

Being pushed into a higher bracket does not mean all income is taxed at that rate. Only the portion within that bracket is taxed at the higher percentage.

Additional Family Relief

Parents could see more relief through the child tax credit. The maximum credit will increase from $2,200 to $2,300 for each eligible child.

Qualified families may be able to get up to $1,800 of that amount back as a refund, even if they do not owe enough tax to use the full credit.

The IRS is also boosting the earned income tax credit for eligible workers. Families with three or more qualifying children could receive as much as $8,496, up from $8,231.

Other updates affect adoption costs, workplace health savings plans and gifts. The annual gift tax exclusion, for example, will rise from $19,000 to $20,000 per recipient.

The changes are part of the IRS’s annual inflation adjustments, which cover nearly 70 tax provisions. The agency published the full figures in Revenue Procedure 2026-35.

Taxpayers filing in early 2027 will still use the rules for the 2026 tax year. The newly announced figures generally apply to income earned starting January 1, 2027.