IRS Unveils 2027 Tax Changes: New Brackets, Deductions and Credits
Summary
The IRS announced inflation adjustments to nearly 70 federal tax provisions for the 2027 tax year, affecting income earned in 2027 and generally reported in 2028. Changes include higher income thresholds for all seven tax brackets, larger standard deductions and increases to several family and savings-related tax benefits.Key Facts
- The seven federal income tax brackets remain in place, but their income thresholds will rise.
- The standard deduction will be $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household.
- The maximum Child Tax Credit will increase to $2,300 per eligible child, with up to $1,800 refundable.
- The maximum Earned Income Tax Credit for qualifying taxpayers with at least three eligible children will rise to $8,496.
- The Adoption Tax Credit will increase to $18,250, with up to $5,280 potentially refundable.
- The federal estate tax exclusion will rise to $15.48 million, and the annual gift tax exclusion will increase to $20,000 per recipient.
- The annual Health Flexible Spending Plan contribution limit will increase by $100, to $3,500.
- Personal exemptions will remain at zero in 2027.
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