Published November 9, 2026

The IRS has released its annual inflation adjustments for tax year 2027. If you are already planning for next year, or you are running a small business, these are the numbers that will shape what you owe or get back.

Below is a plain language summary of the official announcement, with every figure taken directly from the IRS release and Revenue Procedure 2026-35.

What it is

Each year the IRS adjusts roughly 70 tax provisions for inflation. On November 5, 2026, the IRS announced the figures for tax year 2027. These adjustments generally apply to the tax return you will file in 2028, not the return you file in 2027.

This is a final announcement, not a proposal. The figures come from Revenue Procedure 2026-35, which is the official source document.

What the official source says

The standard deduction goes up. For tax year 2027 it is $33,200 for married couples filing jointly, which is $1,000 more than 2026. For single filers and married people filing separately it is $16,600. For heads of household it is $24,925.

The tax brackets shift. The top rate stays at 37% for single filers with income above $661,375, or $793,650 for married couples filing jointly. The other rates begin at these income levels:

• 35% over $264,550 single, or $529,100 married filing jointly
• 32% over $208,325 single, or $416,650 married filing jointly
• 24% over $109,125 single, or $218,250 married filing jointly
• 22% over $52,025 single, or $104,050 married filing jointly
• 12% over $12,800 single, or $25,600 married filing jointly
• 10% for income of $12,800 or less single, or $25,600 or less married filing jointly

The Child Tax Credit rises. The maximum credit for 2027 is $2,300, up $100 from 2026. The refundable portion is $1,800, also up $100.

The Earned Income Tax Credit rises. The maximum credit for 2027 is $8,496 for taxpayers with three or more qualifying children, up from $8,231 for 2026.

Estate and gift limits rise. The estate tax basic exclusion amount is $15,480,000 for people who die in 2027, up from $15,000,000 for 2026. The annual gift exclusion is $20,000 per person, up from $19,000. For gifts to a spouse who is not a U.S. citizen, the exclusion is $201,000, up from $194,000.

Business expensing rises. For tax year 2027 you can expense up to $2,640,000 of section 179 property, up from $2,560,000 for 2026. The limit for sport utility vehicles is $33,100, up from $32,000.

Other adjusted amounts for 2027:

• Adoption credit: up to $18,250 of qualified expenses, up from $17,670. The refundable portion is $5,280.
• Alternative Minimum Tax exemption: $93,000 for unmarried individuals, phasing out at $515,950. For married couples filing jointly it is $144,700, phasing out at $1,031,900.
• Health flexible spending accounts: $3,500 contribution limit, up $100. The carryover maximum is $700, up $20.
• Qualified transportation and parking fringe benefit: $350 per month, up $10.
• Foreign earned income exclusion: $137,300, up from $132,900.
• Employer-provided childcare credit: maximum of $515,943.67, up from $500,000. It is $619,132.40 if the employer is an eligible small business.

Two items did not change. Personal exemptions remain at zero for tax year 2027, as they were for 2026. The Lifetime Learning Credit income phase out also stays the same, between $80,000 and $90,000 for single filers, or $160,000 and $180,000 for joint returns, because it has not been indexed since 2020.

What it means for you

The headline for most households is the standard deduction. If you take the standard deduction, a larger deduction means less of your income is taxed. That is worth real money, and it is why the 2027 filing year is a good one to review your withholding early.

If you itemize, the standard deduction change does not apply to you directly, but the bracket changes still do. Every bracket threshold moved up, which means a raise or a small increase in income may not push you into a higher rate the way it would have under last year’s numbers.

If you are a business owner, the section 179 expensing increase and the higher SUV limit are the items to pay attention to. If you are buying equipment in 2027, the timing of that purchase matters.

If you have family changes coming, such as a new child, an adoption, or a change in marital status, the credit amounts above are what you should plan around.

What to do now

• Check your paycheck withholding. A larger standard deduction can mean you are having too much withheld, which is money sitting with the IRS instead of in your account. You can adjust it with a new Form W-4.
• If you are self employed or a business owner, note the section 179 figure and talk through equipment timing before year end.
• If you are planning a large gift or an estate update, the $20,000 annual gift exclusion and the $15,480,000 estate exclusion are the numbers to use for 2027 planning.
• If you received a letter from the IRS about a prior year, do not wait for the new tax year to deal with it. Those matters are separate and they do not fix themselves.

Official sources

• IRS news release IR-2026-133, November 5, 2026: IRS releases tax inflation adjustments for tax year 2027
• Revenue Procedure 2026-35, the full technical table: Revenue Procedure 2026-35 (PDF)

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