Key Points

  • The IRS released its annual inflation adjustments for tax year 2027 on Thursday 5 November, raising every federal income-tax bracket and the standard deduction.
  • The standard deduction rises to $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household.
  • All seven tax rates stay the same — 10%, 12%, 22%, 24%, 32%, 35% and 37% — only the income thresholds move, by about 3.2%.
  • The top rate of 37% now applies to single filers earning more than $661,375, and to married couples earning more than $793,650.
  • The new figures apply to income earned in 2027, on tax returns filed in early 2028; the return filed next spring still uses the 2026 numbers.

The Internal Revenue Service has raised the 2027 tax brackets, lifting the standard deduction to $16,600 for single filers and $33,200 for married couples in its annual inflation adjustment.

What happened: IRS lifts every 2027 tax bracket

The Internal Revenue Service has published its annual inflation adjustments for tax year 2027, widening every federal income-tax bracket and raising the standard deduction for all filing statuses. The announcement, made on Thursday 5 November in Revenue Procedure 2026-35, covers nearly 70 provisions of the tax code and uses an inflation factor of about 3.2 percent, based on the chained consumer price index measured from September 2025 through August 2026.

The standard deduction — the flat amount about nine in ten taxpayers subtract instead of itemising — rises to $16,600 for single filers and married people filing separately, up $500 from $16,100 in 2026. Married couples filing jointly can claim $33,200, up $1,000 from $32,200, while heads of household get $24,925, up $775 from $24,150.

The seven tax rates themselves do not change. They remain 10%, 12%, 22%, 24%, 32%, 35% and 37%; only the income levels at which each rate starts have moved higher. For a single filer, the 10% rate now covers taxable income up to $12,800, the 12% band runs to $52,025, the 22% band ends at $109,125, the 24% at $208,325, the 32% at $264,550 and the 35% at $661,375, with everything above that taxed at 37%. Married couples filing jointly see the same shape at roughly double the width, with the top rate starting above $793,650.

The IRS also raised the maximum child tax credit to $2,300 per child, up $100 from $2,200, and lifted the lifetime gift and estate tax exemption to $15.48 million per person, up from $15 million. The personal exemption remains at $0. The separate $6,000 deduction for eligible people aged 65 or older, introduced under the One Big Beautiful Bill Act, continues through 2028. Retirement account limits, including 401(k) and IRA contribution caps, are announced separately each November and had not yet been published.

Why it matters: more pay shielded from higher rates

Because the United States taxes income in bands, a higher threshold means more of a worker’s pay falls into a lower bracket. A single filer earning $60,000, for example, will now see the dollars between $52,025 and $60,000 taxed at 22% only up to the point where the next band begins, while the standard deduction takes a bigger slice off the top before any tax is calculated at all. For most households the change is modest — a few hundred dollars of tax saved — but it arrives as families plan next year’s budgets, and it matters most to people sitting just below a bracket boundary.

The timing also matters. The announcement landed in the same week that Wall Street suffered its worst sell-off since April, with the Nasdaq plunging 5.52% on Thursday as chip stocks crashed — a reminder that households are watching both their pay packets and their investments at once. Read more: Nasdaq plunges 5.52% as chip stocks crash — https://worldpulsewire.com/2026/11/06/nasdaq-plunges-chip-stocks-crash/

Tax professionals stress that nothing changes for the return due next spring. The 2026 brackets and the $16,100 standard deduction still govern that filing, and the new figures only take effect for income earned from 1 January through 31 December 2027. Anyone who adjusts their withholding now should be planning for next year’s pay, not this year’s refund.

What happens next: payroll tables update in January

Employers will refresh their payroll tables to the 2027 figures in January, so workers should see the new withholding reflected in their first pay packets of the year. Tax software makers will build the new brackets in before the 2027 filing season, and the IRS will publish the retirement-account limits separately in the coming weeks.

The brackets are set by law each year from inflation, so the 2028 figures will follow the same formula next autumn, measured on prices in the 12 months ending August 2027. For now, the message from the IRS is simple: rates are unchanged, thresholds are higher, and the standard deduction most Americans claim is worth $500 more. Read more: Musk’s $474M midterm bet backfires as Tesla and SpaceX shares fall — https://worldpulsewire.com/2026/11/05/musk-midterm-losses-tesla-spacex-fall/

Sources: IRS (Revenue Procedure 2026-35, IR-2026-133) / USA Today | 6 Nov 2026. The IRS announced the 2027 inflation adjustments on Thursday 5 November 2026 (US time).