The IRS announced new federal income tax brackets for 2027, raising income thresholds across each bracket for tax year 2027 returns filed in 2028.
The top marginal rate of 37% will apply to individuals earning above $661,375 in taxable income and married couples filing jointly earning $793,650 or more. The agency also increased long-term capital gains brackets, the estate and gift tax exemption, and earned income tax credit eligibility thresholds.
The standard deduction for married couples filing jointly rises to $33,200 in 2027, up from $32,200 in 2026. Single filers can claim $16,600 starting in 2027, up from $16,100.
The IRS adjusts tax bracket income ranges yearly based on the consumer price index. The consumer price index climbed 3.7% in September 2026 from one year earlier, up from 3.4% in August, according to the Bureau of Labor Statistics.
The federal income tax system includes seven income tiers for 2027, with rates ranging from 10% to 37%. Tax rates apply to each band of income rather than as a flat percentage on all earnings.
Investors should monitor how the 2027 tax bracket adjustments affect consumer spending and disposable income levels.