The IRS has released updated tax brackets and deduction limits for the 2027 tax year. The changes will apply to income earned in 2027, with tax returns due in 2028.
The agency adjusts these figures annually to account for inflation. IRS CEO Frank Bisignano said taxpayers and businesses would see higher benefits, including a larger standard deduction and Child Tax Credit, as well as an increase in the amount businesses can expense.
For 2027, the standard deduction will be $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household. Most taxpayers take the standard deduction rather than itemizing.
The IRS has also revised the income thresholds for its tax brackets. The maximum Child Tax Credit will rise by $100 to $2,300, while the refundable portion will increase by the same amount, to $1,800.
The annual gift-tax exclusion will increase to $20,000 in 2027, from $19,000 in 2026. For gifts to a spouse who is not a U.S. citizen, the limit will rise to $201,000 from $194,000.
The estate-tax exclusion for people who die in 2027 will be $15.48 million, up from $15 million in 2026.
For taxpayers with at least three qualifying children, the maximum Earned Income Tax Credit will increase to $8,496 in 2027, compared with $8,231 the year before.
The tax credit for qualifying adoption expenses will rise to $18,250, from $17,670. Up to $5,280 of the credit may be refundable in 2027.
