The IRS Moved 2027 Tax Brackets and Deductions Higher

Tax season has a way of putting three calendars in one room.

Clients will soon file 2026 returns, make 2027 estimates and ask whether a deal closing next year still works. The IRS has now released the inflation-adjusted numbers for that third job.

The official 2027 tables cover tax brackets, deductions, credits, estate planning and dozens of business limits. The changes do not rewrite the tax code. They move the dollar lines so inflation does not push taxpayers into higher brackets as quickly.

That sounds routine. It is also exactly how an old spreadsheet creates a new mistake.

For 2027, the standard deduction rises to $33,200 for married couples filing jointly. That is $1,000 more than the 2026 amount.

Single filers and married people filing separately get a $16,600 standard deduction. Heads of household get $24,925.

Those figures matter before a return exists. They affect withholding checks, quarterly estimates, charitable planning and the basic choice between itemizing and taking the standard deduction.

The Child Tax Credit also rises. Its maximum reaches $2,300 for 2027, with up to $1,800 potentially refundable.

The seven federal income tax rates remain 10%, 12%, 22%, 24%, 32%, 35% and 37%.

What changed is where each rate begins. For a single filer, the 37% rate starts above $661,375. For a married couple filing jointly, it starts above $793,650.

At the bottom, the 10% bracket covers the first $12,800 of taxable income for a single filer and the first $25,600 for a joint return. The 12% bracket begins above those amounts.

The distinction matters when advisers explain a raise, a bonus or a gain. Crossing into a new bracket does not make every dollar taxable at the higher rate. Only the dollars inside that bracket get the higher rate.

The basic estate tax exclusion rises to $15.48 million for people who die in 2027, up from $15 million in 2026.

The annual gift tax exclusion moves from $19,000 to $20,000 per recipient. Gifts to a spouse who is not a U.S. citizen get a separate $201,000 annual limit.

These are planning thresholds, not automatic instructions to transfer money. Large gifts can affect basis, liquidity and a family's long-term plan. The new numbers should update the model, not replace the conversation.

The maximum Section 179 deduction rises to $2.64 million for 2027. Section 179 lets qualifying businesses deduct the cost of eligible property immediately, subject to limits and other rules, instead of recovering all of it over time.

The special cap for sport utility vehicles rises to $33,100.

Other business and employee limits move as well. The monthly cap for qualified parking and transit benefits becomes $350. The health flexible spending account salary-reduction limit reaches $3,500, with up to $700 available for carryover when a plan permits it.

The maximum Earned Income Tax Credit for a family with three or more qualifying children rises to $8,496. The maximum adoption credit becomes $18,250, including up to $5,280 that may be refundable.

The easiest mistake is not a complicated interpretation. It is typing a correct 2026 number into a 2027 projection.

Advisers can prevent that by labeling assumptions with the tax year, linking the source table and keeping a short change log in planning files. Payroll, estate, charitable and capital-spending models should not all depend on one unlabeled tax cell.

The IRS has supplied the new reference points. The useful work now is making sure every 2027 conversation starts from the same set of numbers.

Join Ledger Lowdown for more plain-English reporting on the tax rules shaping client decisions.