IRS lifts 2027 standard deduction to $16,600 for single filers

The IRS has set the 2027 standard deduction at $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household, according to inflation adjustments announced Friday.

The changes apply to income earned in 2027, which taxpayers will report when they file in 2028. The 10% bracket covers single filers earning $12,800 or less and joint filers earning $25,600 or less. The top 37% rate begins at $661,375 for singles and $793,650 for joint filers. The 22% bracket starts above $52,025 for singles and $104,050 for couples, and the 24% bracket above $109,125 and $218,250.

Families see several increases. The child tax credit rises $100 to $2,300, and its refundable portion rises $100 to $1,800. The maximum earned income tax credit for filers with three or more children climbs to $8,496 from $8,231. The qualified adoption expense credit goes to $18,250 from $17,670, with $5,280 refundable.

Wealth-transfer limits also move up. The annual gift tax exclusion rises to $20,000 from $19,000, and the estate tax basic exclusion hits $15,480,000 for people who die in 2027, up from $15 million this year.

IRS CEO Frank Bisignano said: "American individuals and businesses will see increased tax benefits next tax year." He noted the revisions also include a boost to the amount businesses can expense.