WUSA9 reports that the IRS announced higher federal tax brackets for the 2027 tax year to adjust for inflation, along with a higher standard deduction and other changes to certain deductions and credits.
The adjustments will apply to tax returns filed in 2028. For tax year 2027, the standard deduction increases to $33,200 for married couples filing jointly, up $1,000 from 2026. For single taxpayers and married individuals filing separately, it rises to $16,600, and for heads of household it will be $24,925.
The IRS said the top tax rate will remain 37% for individual single taxpayers with incomes greater than $661,375, and $793,650 for married couples filing jointly. The other 2027 brackets, for returns filed in 2028, are 35% for incomes over $264,550 ($529,100 for married couples filing jointly); 32% over $208,325 ($416,650 jointly); 24% over $109,125 ($218,250 jointly); 22% over $52,025 ($104,050 jointly); 12% over $12,800 ($25,600 jointly); and 10% for incomes of $12,800 or less ($25,600 jointly).
The maximum Child Tax Credit is increasing to $2,300 for 2027, up $100 from 2026, and the refundable portion is $1,800, also up $100. The Earned Income Tax Credit maximum is increasing to $8,496 for qualifying taxpayers with three or more qualifying children, up from $8,231. The maximum adoption credit will increase to up to $18,250, up from $17,670, with $5,280 refundable. The IRS also announced changes to Alternative Minimum Tax exemptions, estate tax and gifts.
