2027 Tax Brackets Are Out: What the New $16,600 Standard Deduction Means for You

What did the IRS announce on November 5, 2026?

The IRS released the tax year 2027 inflation adjustments on Thursday, November 5, 2026, in news release IR-2026-133 and Revenue Procedure 2026-35. The release covers almost 70 tax provisions, including the rate schedules, the standard deduction, credits, the alternative minimum tax, and the estate and gift exclusions. Every dollar amount in this guide comes from that release or from the Social Security Administration. Nothing here is a projection unless it is labeled as one.

The release also says taxpayers keep benefiting from the Working Families Tax Cuts, with those credits and deductions rising with the adjustment. The IRS chief executive, Frank J. Bisignano, put it plainly in the release: hardworking taxpayers will see those credits and deductions increase. The personal exemption stays at $0 for 2027, the same as 2026.

Two things about this release trip people up every year, so get them straight now. First, the 2027 figures apply to income earned in 2027, which goes on the return filed in early 2028. The return due April 15, 2027 covers 2026 income and uses the 2026 numbers. Second, the release does not include retirement plan limits. The 2027 401(k), 403(b), and IRA limits come in a separate fall notice, and that notice has not arrived yet. Last year it came on November 13, 2025, so mid-November is the window to watch.

Here is the split between what is official and what is still pending. Official now: the 2027 tax brackets, the standard deduction, the estate and gift exclusions, the Health Savings Account limits, and the Social Security cost-of-living adjustment and taxable maximum. Pending: the 401(k), 403(b), and IRA contribution limits and catch-up amounts, plus the start date of the 2027 filing season. If you see a 2027 401(k) number quoted as fact this week, it is not. It is a forecast, and the only honest label for it is a forecast.

What are the 2027 tax brackets?

A tax bracket is the range of taxable income taxed at one rate. Your income fills the brackets from the bottom up, so only the dollars above each edge pay the higher rate.

The seven rates do not change. They run from 10% to 37%, exactly like 2026. What changes is where each rate starts. Every bracket edge moves up by roughly 3%, so more of your income sits in the lower brackets before the higher rates kick in. That is how inflation adjustments work: the rates stay put, the thresholds climb.

For a single filer, the 10% rate now covers the first $12,800 of taxable income, up from $12,400 in 2026. The 12% bracket runs to $52,025, up from $50,400. The 22% bracket runs to $109,125, up from $105,700. The 24% bracket runs to $208,325, up from $201,775. The 32% bracket runs to $264,550, up from $256,225. The 35% bracket runs to $661,375, up from $640,600. Above that, the 37% top rate applies.

2027 federal income tax brackets

Rate	Single, taxable income over	Married filing jointly, over	Head of household, over
10%	$0	$0	$0
12%	$12,800	$25,600	$18,250
22%	$52,025	$104,050	$69,650
24%	$109,125	$218,250	$109,100
32%	$208,325	$416,650	$208,300
35%	$264,550	$529,100	$264,550
37%	$661,375	$793,650	$661,350

The table above comes from Revenue Procedure 2026-35, published with IRS news release IR-2026-133 on November 5, 2026. The rate applies to taxable income above each threshold, not to your whole income. That is the part people get wrong most often. If you are in the 22% bracket, only the dollars above $52,025 get taxed at 22%. Everything below that is taxed at 10% and 12%.

For a married couple filing jointly, the 12% bracket now runs to $25,600 and the 22% bracket to $104,050. The 24% bracket runs to $218,250, the 32% to $416,650, the 35% to $529,100, and the 37% top rate starts above $793,650. Heads of household sit between the single and joint numbers on most lines, with the 22% bracket running to $69,650 and the 24% to $109,100.

The practical effect is small for most people and real all the same. A single filer earning the same wage in 2027 as in 2026 pays a little less federal income tax, because about $500 more of their income is shielded by the higher standard deduction and the wider brackets push a few hundred dollars down into lower rates. The next section runs the exact math on two real incomes.

How much is the 2027 standard deduction?

The standard deduction rises $500 for single filers, to $16,600, and $1,000 for married couples filing jointly, to $33,200. Heads of household get $24,925, up from $24,150. Married people filing separately also get $16,600. This is the number most people feel first, because it is the chunk of income that never gets taxed at all.

Standard deduction, 2026 vs 2027

Filing status	2026	2027	Increase
Single	$16,100	$16,600	$500
Married filing jointly	$32,200	$33,200	$1,000
Head of household	$24,150	$24,925	$775
Married filing separately	$16,100	$16,600	$500

About 90% of taxpayers take the standard deduction instead of itemizing, so this one line does more for most households than any bracket change. If you are self-employed, the same logic applies, and the standard deduction stacks with your business deductions. It does not reduce self-employment tax, only income tax, which is a detail worth knowing before you plan around it. Our quarterly estimated taxes guide walks through how the two taxes interact for self-employed workers.

The release also raised several other amounts that matter to families and small business owners. The maximum Child Tax Credit rises to $2,300, up $100 from 2026, with the refundable portion up to $1,800. The Earned Income Tax Credit for three or more qualifying children rises to $8,496, up from $8,231. The health flexible spending arrangement limit rises to $3,500, up $100, with a carryover maximum of $700, up $20. Qualified transportation fringe and parking rises to $350 a month, up $10.

For higher earners, the alternative minimum tax exemption rises to $93,000 for unmarried filers, with the phase-out starting at $515,950, and $144,700 for married couples filing jointly, with the phase-out starting at $1,031,900. The estate tax basic exclusion rises to $15,480,000, up from $15,000,000, and the annual gift exclusion rises to $20,000, up from $19,000. If you give money to family each year, that extra $1,000 per recipient adds up fast.

What does this do to your paycheck?

Run the numbers on real pay and the savings look modest, which is the honest answer. Take a single filer earning $85,000 in wages. In 2027, the $16,600 standard deduction leaves $68,400 of taxable income. The tax works out to $1,280 at 10% on the first $12,800, plus $4,707 at 12% on the next $39,225, plus $3,602.50 at 22% on the remaining $16,375. Total: $9,589.50. Run the same $85,000 through the 2026 numbers and the tax is $9,870. The difference is about $280 for the year, or roughly $23 a month.

Now take a married couple earning $150,000 combined. In 2027, the $33,200 standard deduction leaves $116,800 taxable. The tax is $2,560 at 10% on the first $25,600, plus $9,414 at 12% on the next $78,450, plus $2,805 at 22% on the last $12,750. Total: $14,779. Under the 2026 numbers the same income costs $15,340. The difference is $561 for the year, about $47 a month.

Two caveats keep this honest. First, these are federal income tax numbers only. State income tax and payroll taxes are separate, and your state may not follow the federal adjustments. Second, your paycheck will not jump the day the release comes out. Employers adjust withholding tables for the new year, so the change shows up in early 2027 paychecks, and only if your employer updates on time. If your withholding looks off in January, check it against the new tables instead of assuming a mistake.

Founders with uneven income should pay attention to a different number: the timing. The 2027 brackets help you in 2027, but the return you file in April 2027 still uses 2026 numbers. If you had a big year in 2026, the planning that saves you money is the 2026 planning, not the 2027 brackets. Our year-end money moves guide covers the nine checks that still matter before December 31, and our tax-loss harvesting guide covers the one move that has a hard deadline.

What changed for HSAs and Social Security in 2027?

The Health Savings Account limits for 2027 were set months ago, in Revenue Procedure 2026-24, and they are official. Self-only coverage rises to $4,500, up from $4,400, and family coverage rises to $9,000, up from $8,750. The age 55 catch-up stays at $1,000 because it is fixed by law and does not move with inflation. The high-deductible plan out-of-pocket maximum rises to $8,700 for self-only coverage and $17,400 for family coverage.

If you have a high-deductible health plan through your business or a marketplace plan, the HSA is the rare account that is triple tax-advantaged: contributions go in pre-tax, growth is untaxed, and withdrawals for medical costs come out untaxed. The $4,500 self-only limit for 2027 is set, so you can plan January contributions now instead of waiting. Self-employed founders should check whether their plan still qualifies as a high-deductible plan for 2027 before counting on the deduction. Our I-bond guide covers another inflation-linked savings option that reset this month.

Social Security changed too. The Social Security Administration released its 2027 fact sheet on October 14, 2026. The cost-of-living adjustment for 2027 is 3.6%, and the taxable maximum rises to $192,300, up from $184,500 in 2026. That means wages up to $192,300 get hit with the 6.2% Social Security payroll tax. If you earn above the old maximum, expect a little more payroll tax in 2027.

The earnings test also moved. Below full retirement age, the administration withholds $1 in benefits for every $2 earned above $25,560 in 2027. In the year you reach full retirement age, it withholds $1 for every $3 above $67,920, counting only earnings before the birthday month. If you are a founder still drawing a salary past retirement age, or a parent who works part-time while collecting, these thresholds decide whether extra work costs benefits.

What about 401(k) and IRA limits for 2027?

Still not announced, and that is the most common misunderstanding this week. IR-2026-133 does not contain the 2027 retirement plan limits. The IRS sets those in a separate fall notice, and as of November 7, 2026, that notice has not appeared. Last year the 2026 limits came out on November 13, 2025, so the announcement is likely days away, but likely is not official.

Until the notice lands, the only official limits are the 2026 ones from IRS Notice 2025-67: a $24,500 employee deferral for 401(k), 403(b), and Thrift Savings Plan accounts, a $7,500 IRA limit, an $8,000 catch-up at age 50 and older, and an $11,250 catch-up for ages 60 to 63. That last one is the SECURE 2.0 super catch-up, and it only applies in the four-year window from 60 to 63.

What do the forecasts say? Actuarial firm Milliman published its final estimate on October 15, 2026, projecting a 2027 deferral limit of $25,500, with the age 50 catch-up rising to $8,500 and the 60 to 63 catch-up to $11,750. The math behind that projection is solid: it uses the September 2026 CPI-U reading of 336.940, which cleared the threshold for $25,500. But a projection is not a limit. Do not set your 2027 payroll deferral cap on it, and do not tell an employee the number changed until the IRS says so. If you run a solo 401(k), the same wait applies. Our solo 401(k) vs SEP IRA guide explains which plan fits a one-person business, and our Roth IRA conversion ladder guide covers the long game for retirement withdrawals.

The practical move is simple. Keep contributing at the 2026 limits for now. Check irs.gov in mid-November for the retirement notice. When it lands, adjust your January payroll election to the new number. A $1,000 higher limit is worth about $83 a month in extra pre-tax room, which is real money over a career, but only if you actually use it.

What should you do before December 31?

The 2027 brackets are news, but the money you save this year comes from 2026 moves. The return due April 15, 2027 uses 2026 numbers, and several of the best moves expire on December 31. Start with the fourth-quarter estimated tax payment, due Friday, January 15, 2027. If your 2026 income ran higher than you planned, that payment is where the catch-up happens, and the penalty for skipping it is real.

Next, check your 401(k) contributions against the 2026 limit of $24,500. If you are short and your employer plan allows it, a December payroll bump can close the gap. The same applies to the $7,500 IRA limit, though IRA contributions for 2026 can wait until the April filing deadline. Health Savings Account contributions for 2026 also have until the filing deadline, but the money works harder the earlier it goes in.

Then look at the two moves with hard year-end deadlines. Tax-loss harvesting only counts if the sale settles in 2026, and the wash-sale rule blocks you from buying the same security back within 30 days. Charitable gifts only count if they are made by December 31. Both are covered in the year-end guides linked above, with the exact dates and the mistakes that cost people money.

Finally, set a reminder for mid-November to check for the 2027 retirement limits, and another for January to confirm your withholding reflects the new tables. The 2027 brackets will save a typical single filer about $280 and a typical married couple about $561, which is a nice dinner out, not a windfall. The bigger win is the habit: checking the numbers once a year, adjusting the payroll election once, and letting the wider brackets do their quiet work.

The bottom line

The IRS released the 2027 tax brackets on November 5, 2026, and the news is good but small. The standard deduction rises to $16,600 single and $33,200 joint, every bracket edge moves up about 3%, and the rates stay at 10% to 37%. A single filer earning $85,000 saves about $280 a year. A married couple earning $150,000 saves about $561. The 2027 numbers apply to the return filed in 2028, so the April 2027 return still uses 2026 figures.

The gap in the release matters more than the numbers in it. The 2027 401(k) and IRA limits are still not announced, and Milliman projects $25,500 for the 401(k) deferral. Do not set payroll elections on a projection. Keep contributing at the 2026 limits, check for the IRS retirement notice in mid-November, and put the real savings work into the 2026 moves that expire December 31: estimated taxes, 401(k) top-ups, tax-loss harvesting, and charitable gifts.

Three numbers to remember for January: the HSA limit is $4,500 self-only and $9,000 family, the Social Security taxable maximum is $192,300 with a 3.6% COLA, and the fourth-quarter estimated tax payment is due January 15, 2027. Set those three reminders now and the new brackets take care of themselves.

The bracket math is small on purpose. A single filer on eighty-five thousand dollars saves about two hundred eighty dollars a year, roughly twenty-three dollars a month, and a couple on one hundred fifty thousand dollars saves about five hundred sixty-one dollars, roughly forty-seven dollars a month. Treat the 2027 numbers as a January paycheck tweak, not a windfall, and spend the planning energy on the 2026 moves that expire December 31: estimated taxes, 401(k) top-ups, and tax-loss harvesting.

Frequently asked questions

What is the 2027 standard deduction?

For tax year 2027 the standard deduction is $16,600 for single filers and married people filing separately, $33,200 for married couples filing jointly, and $24,925 for heads of household. The IRS announced these amounts on November 5, 2026 in IR-2026-133. The single amount is up $500 from 2026 and the joint amount is up $1,000.

What are the 2027 tax brackets?

The seven rates stay the same, from 10% to 37%, but every bracket edge moves up. For a single filer the 12% bracket now runs to $52,025 of taxable income and the 22% bracket to $109,125. The top 37% rate starts above $661,375 single and $793,650 joint. Only the income above each threshold gets taxed at that rate.

When do the 2027 tax brackets take effect?

The 2027 figures apply to income earned in 2027, which goes on the return filed in early 2028. The return due April 15, 2027 still uses the 2026 numbers. Nothing about the 2027 brackets changes the tax you owe this coming spring.

What is the 2027 401(k) contribution limit?

Not announced yet. IR-2026-133 does not include retirement plan limits, and the IRS has not said when the separate notice will come. The 2026 limit is $24,500, with an $8,000 catch-up at age 50 and older. Actuarial firm Milliman projects the 2027 deferral limit at $25,500, but that is a projection, not an IRS figure.

What is the Social Security COLA for 2027?

The Social Security cost-of-living adjustment for 2027 is 3.6%, announced by the Social Security Administration on October 14, 2026. The taxable maximum rises to $192,300 in 2027, up from $184,500 in 2026. The payroll tax rate stays at 6.2% each for the employee and the employer.