2027 tax brackets and standard deduction: What changes and what to do before December 31

The IRS published the 2027 inflation adjustments on November 5, 2026, in Revenue Procedure 2026-35. The seven tax rates stay the same, from 10% to 37%. The income ranges for each bracket, the standard deduction and more than 60 other amounts rise about 3.2%. These numbers apply to income you earn in 2027 and report on the return you file in 2028.

The short answer

Your 2026 return, due April 15, 2027, still uses the 2026 numbers. The 2027 numbers matter now for one reason: they set the price of moving income or deductions across December 31.

• Bracket lines rise about 3.2%. The same taxable income is taxed slightly less in 2027, which makes deferring income into January worth a little more.
• The annual gift exclusion rises to $20,000. You can give $19,000 per person in December and $20,000 more in January.
• Business thresholds rise too. Section 179, the QBI deduction thresholds and the 1099 reporting threshold all move up.

2027 standard deduction

The $6,000 senior deduction for taxpayers 65 and older is not indexed. It stays at $6,000 per person through 2028 and shrinks by 6% of modified AGI above $75,000 ($150,000 for joint filers).

2027 tax brackets: Single filers

• 10% on taxable income up to $12,800
• 12% from $12,800 to $52,025
• 22% from $52,025 to $109,125
• 24% from $109,125 to $208,325
• 32% from $208,325 to $264,550
• 35% from $264,550 to $661,375
• 37% above $661,375

2027 tax brackets: Married filing jointly

• 10% up to $25,600
• 12% from $25,600 to $104,050
• 22% from $104,050 to $218,250
• 24% from $218,250 to $416,650
• 32% from $416,650 to $529,100
• 35% from $529,100 to $793,650
• 37% above $793,650

2027 tax brackets: Head of household

• 10% up to $18,250
• 12% from $18,250 to $69,650
• 22% from $69,650 to $109,100
• 24% from $109,100 to $208,300
• 32% from $208,300 to $264,550
• 35% from $264,550 to $661,350
• 37% above $661,350

Married couples filing separately use the single brackets, except that the 35% bracket ends at $396,825.

Other 2027 numbers that change your plan

401(k) and IRA contribution limits are not in this revenue procedure. The IRS announces them separately.

What to do before December 31, 2026

Five moves use the gap between the 2026 and 2027 numbers.

Move 1: Decide where your income lands

A single filer with $110,000 of taxable income pays $18,998 of federal income tax at 2026 rates and $18,759 at 2027 rates. The bracket change alone is worth a few hundred dollars. It is not a reason to defer income by itself.

Deferral pays when 2027 income will be the same or lower and the income sits near a bracket line. Business owners on the cash method can send December invoices in January, or pay deductible expenses in December. Check the QBI threshold first. Joint filers whose 2026 taxable income is just above $403,500 can start to lose part of the 20% deduction if the business is a specified service business or has little W-2 payroll. In 2027 that line moves to $416,600.

Move 2: Use the $19,000 gift exclusion before it resets

The annual exclusion is per calendar year. A gift of $19,000 to a child on December 20 and $20,000 on January 5 uses two years of exclusions in two weeks. If each spouse gives from their own money, a married couple can move $78,000 to each child that way without using any lifetime exemption. Gifts above the exclusion, and gifts split between spouses, need Form 709 even when no tax is due.

Move 3: Fill the 0% capital gains bracket

Joint filers with 2026 taxable income up to $98,900, counting the gain, pay 0% on long-term capital gains. If your income is below that this year, selling appreciated shares in December and buying them back resets your cost basis at no federal tax. The wash sale rule applies only to losses, not gains. State tax may still apply.

Move 4: Update payroll, benefits and vendor files for January

• Withholding. Payroll software applies the 2027 tables in January. Owners who pay themselves a salary should check their W-4.
• Benefits. Health FSA elections can go up to $3,500, and the transit and parking benefit to $350 a month.
• 1099s. Payments made in 2026 are reported in January 2027 at the $2,000 threshold. For payments made in 2027, the threshold is $2,100. Collect a W-9 from every contractor before the first payment either way.

Move 5: Reset your 2027 estimated payments

Your first 2027 estimated payment is due April 15, 2027. If your 2026 adjusted gross income is over $150,000, paying 110% of your 2026 tax in four installments avoids the underpayment penalty, no matter what 2027 brings. The new brackets can lower the payment you need to cover your actual 2027 tax.

Numbers that did not change

• Tax rates. The seven rates are permanent under the One Big Beautiful Bill Act.
• Senior deduction. $6,000 per person through 2028, as above.
• SALT cap. $40,400 for 2026. The law raises it by 1% a year through 2029 and phases it down for higher incomes. See our SALT cap guide.
• Personal exemptions. Still zero.

For the 2026 numbers you will use on the return you file next spring, see 2026 tax brackets and standard deduction. For the moves with a hard December 31 deadline, see the December 31 tax deadline.

Frequently asked questions

When do the 2027 tax brackets apply?

They apply to income you earn from January 1 through December 31, 2027. You use them on the return you file in 2028. Paychecks will reflect them in January 2027 through the new withholding tables.

Do the 2027 numbers change my 2026 tax return?

No. The return you file by April 15, 2027 uses the 2026 brackets and standard deduction.

Did tax rates go up for 2027?

No. The rates are the same seven rates as 2026. Only the income ranges moved, by about 3.2%.

What is the 2027 standard deduction for a married couple who are both over 65?

The base amount is $33,200. Each spouse adds $1,700, for $36,600. Each spouse can also claim the $6,000 senior deduction, which shrinks once modified AGI passes $150,000. At lower incomes, that is up to $48,600 in total.

What is the 2027 child tax credit?

$2,300 per qualifying child, up from $2,200. Up to $1,800 of it is refundable. The credit still phases out above $200,000 of modified AGI ($400,000 for joint filers).

Should I wait until 2027 to buy equipment?

Not for the higher Section 179 limit alone. 100% bonus depreciation is permanent and has no dollar cap, so most owners don't come near either limit. Buy when the business needs the asset, and make sure it is placed in service in the year you want the deduction. See our bonus depreciation guide.