*The IRS has announced new tax adjustments for 2027, and millions of Americans could see changes in how much of their income is subject to federal taxes.
The changes, announced November 5, cover nearly 70 provisions of the federal tax code and largely reflect adjustments for inflation.
But before anyone starts anticipating a bigger refund, there’s an important detail: These adjustments generally apply to income earned in 2027, with tax returns filed in 2028.
Here’s what the new numbers mean for your household, according to the Internal Revenue Service.
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IRS Raises Standard Deduction for 2027
The standard deduction reduces the amount of income subject to federal income tax for eligible taxpayers.
For 2027, the IRS announced these increases:
- Married filing jointly: $33,200, up $1,000 from 2026.
- Single taxpayers: $16,600, up $500.
- Heads of household: $24,925, up $775.
- Married filing separately: $16,600, up $500.
For example, a married couple with $80,000 in adjusted gross income who qualifies for the full standard deduction would generally have $46,800 in taxable income before any other applicable deductions.
That doesn’t mean receiving a $33,200 refund. It means less income is subject to federal income tax.
Child Tax Credit and Earned Income Credit Increase
Parents may also benefit from higher tax credits.
The maximum Child Tax Credit increases to $2,300 per qualifying child, up from $2,200 in 2026.
The IRS confirms that up to $1,800 of the credit may be refundable, an increase of $100. The actual refundable amount depends on eligibility, qualifying earnings and applicable tax calculations.
The Earned Income Tax Credit also increases for qualifying low- and moderate-income workers.
For households with three or more qualifying children, the maximum credit rises from $8,231 to $8,496.
Not every household qualifies for the maximum. Income, filing status and family circumstances determine eligibility.
Working families, single parents, married couples and small-business owners are among those affected by higher deductions, larger tax credits and updated income brackets.
Federal Tax Brackets Change, but Rates Stay the Same
Federal income tax rates remain unchanged, ranging from 10% to 37%.
What changes are the income thresholds determining when each rate applies.
For 2027, the 22% bracket begins above $52,025 in taxable income for single filers and $104,050 for married couples filing jointly.
The highest 37% rate applies to taxable income exceeding $661,375 for single filers and $793,650 for married couples filing jointly.
Here’s what matters: Moving into a higher tax bracket doesn’t mean all your income gets taxed at that rate.
Only the portion falling within the higher bracket is taxed at that rate.
These adjustments help prevent inflation-related pay increases from automatically pushing more income into higher tax brackets.
Other Changes Affect Businesses and Household Expenses
Several additional tax provisions are increasing in 2027.
The annual gift tax exclusion rises to $20,000 per recipient, while the federal estate tax exclusion increases to $15.48 million.
Employees with eligible health flexible spending arrangements can contribute up to $3,500.
The monthly tax-free limit for qualifying employer-provided transportation and parking benefits rises to $350.
For eligible businesses, the Section 179 deduction limit increases to $2.64 million, subject to applicable restrictions and phaseouts.
When Will the 2027 Tax Changes Affect You?
Here’s the distinction taxpayers should remember.
Tax returns filed in spring 2027 generally cover income earned during 2026. Those returns use the 2026 tax rules.
The newly announced adjustments generally apply to income earned beginning January 1, 2027, and returns filed in 2028.
Employees may also see changes in federal income tax withholding during 2027 as employers update payroll calculations.
However, higher deductions and credits don’t automatically guarantee larger refunds. Individual results depend on income, eligibility, withholding and other tax circumstances.
The bottom line: The IRS is changing the numbers, but knowing which ones apply to your household could make the biggest difference when tax season arrives.
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