Overview
- The IRS announced Thursday that it raised the income thresholds for all seven federal tax brackets for the 2027 tax year so taxpayers face higher nominal income before moving into a higher marginal rate.
- The top marginal rate of 37% will apply to taxable income above $661,375 for single filers and $793,650 for married couples filing jointly for 2027.
- The standard deduction rises to $16,600 for single filers, $33,200 for married couples filing jointly, and $24,925 for heads of household, shifting the choice between itemizing and the standard deduction for many households.
- Long‑term capital gains brackets were increased (0% up to $51,050 for singles, 15% up to $563,200, and 20% above that), and key credits and limits were raised, including the child tax credit to $2,300 and the EITC maximum to $8,496 for families with three or more children.
- The IRS also boosted the lifetime estate and gift exemption to $15.48 million and the annual gift exclusion to $20,000; these routine CPI‑based adjustments do not change tax rates and apply to income earned in 2027 with returns filed in 2028.