The IRS published the official 2027 tax brackets on November 5, 2026, and the headline number is simple: the standard deduction rises to $16,600 for single filers and $33,200 for married couples filing jointly. The seven tax rates do not change — still 10% through 37% — but every income threshold moves up about 3.2%, so more of your income lands in the lower brackets next year.
These numbers come from Revenue Procedure 2026-35, announced in news release IR-2026-133. They apply to income you earn in 2027, which you report on the return you file in early 2028. Your 2026 return, due in April 2027, still uses the 2026 numbers. That timing matters more than it sounds, because the planning moves worth making now are about 2026 — and the new figures tell you what 2027 will look like while you still have time to act.
If you run a small business, this release is more than a news item. The standard deduction, the bracket thresholds, the SALT cap, the gift exclusion, and the estate exemption all moved at once, and each one touches a different year-end decision. Here are the full tables, the worked math, and the five moves to make before December 31.
The 2027 standard deduction, by filing status
The standard deduction is the amount of income you can shield from federal tax without itemizing. For 2027 it rises for every filing status:
| Filing status | 2026 | 2027 | Change |
|---|---|---|---|
| Single / married filing separately | $16,100 | $16,600 | +$500 |
| Married filing jointly / surviving spouse | $32,200 | $33,200 | +$1,000 |
| Head of household | $24,150 | $24,925 | +$775 |
That is not a tax cut in the usual sense. It is inflation indexing doing its job: prices rose, so the IRS raises the deduction so the same real income does not get taxed harder. But the dollars are real. A single filer in the 22% bracket who takes the standard deduction shields $500 more income in 2027, which is $110 less federal tax on the same earnings. A married couple in the 22% bracket saves $220 on the extra $1,000 of deduction alone — before any bracket-threshold effect.
The additional standard deduction for taxpayers 65 and older also rises: $2,100 per qualifying spouse for joint filers in 2027 (up from $2,050), and $2,100 for a single filer 65 or older. Blindness adds the same amounts. The separate $6,000 senior deduction created by the One Big Beautiful Bill Act is not part of this release — it is a separate provision with its own income limits — so do not mix the two when you plan.
The full 2027 tax brackets
The seven rates — 10%, 12%, 22%, 24%, 32%, 35%, 37% — are unchanged. Only the thresholds move. The tables below are the official figures from Rev. Proc. 2026-35, section 3.01.
Single filers
| Tax rate | 2026 taxable income | 2027 taxable income |
|---|---|---|
| 10% | $0 – $12,400 | $0 – $12,800 |
| 12% | $12,400 – $50,400 | $12,800 – $52,025 |
| 22% | $50,400 – $105,700 | $52,025 – $109,125 |
| 24% | $105,700 – $201,775 | $109,125 – $208,325 |
| 32% | $201,775 – $256,225 | $208,325 – $264,550 |
| 35% | $256,225 – $640,600 | $264,550 – $661,375 |
| 37% | Over $640,600 | Over $661,375 |
Married filing jointly
| Tax rate | 2026 taxable income | 2027 taxable income |
|---|---|---|
| 10% | $0 – $24,800 | $0 – $25,600 |
| 12% | $24,800 – $100,800 | $25,600 – $104,050 |
| 22% | $100,800 – $211,400 | $104,050 – $218,250 |
| 24% | $211,400 – $403,550 | $218,250 – $416,650 |
| 32% | $403,550 – $512,450 | $416,650 – $529,100 |
| 35% | $512,450 – $768,700 | $529,100 – $793,650 |
| 37% | Over $768,700 | Over $793,650 |
Heads of household
The head-of-household brackets track the single brackets at the top and sit wider at the bottom: 10% up to $18,250, 12% to $69,650, 22% to $109,100, 24% to $208,300, 32% to $264,550, 35% to $661,350, and 37% above $661,350. Married filing separately mirrors the single brackets through 32%, with the 35% bracket topping out at $396,825 and 37% above that.
One detail worth noting: the 2026 brackets already include the One Big Beautiful Bill’s rebasing of the 10% and 12% brackets, and the 2027 figures index from those new baselines. Comparing 2027 to 2024 or 2025 directly will mislead you — compare 2027 to 2026, which is the comparison that matters for your planning.
What the higher brackets are actually worth
Let me work two quick examples, because “thresholds rose 3.2%” sounds abstract until you see the dollars.
A single filer with $100,000 of taxable income. In 2026, the tax on that income is 10% of $12,400 ($1,240), plus 12% of the next $38,000 ($4,560), plus 22% of the remaining $49,600 ($10,912) — $16,712 in total. In 2027, the same $100,000 costs 10% of $12,800 ($1,280), plus 12% of $39,225 ($4,707), plus 22% of $47,975 ($10,554.50) — $16,541.50. The saving is about $171, and it comes entirely from the wider brackets: $1,625 more income taxed at 12% instead of 22%.
A married couple with $150,000 of taxable income. In 2026: 10% of $24,800 ($2,480), 12% of $76,000 ($9,120), 22% of $49,200 ($10,824) — $22,424. In 2027: 10% of $25,600 ($2,560), 12% of $78,450 ($9,414), 22% of $45,950 ($10,109) — $22,083. The saving is $341.
Neither number will change your life. That is the honest read. The indexing adjustment is designed to keep your real tax burden flat as prices rise, not to hand you a windfall. Where it matters is at the edges: if your income is growing and you were about to cross into the 22% or 24% bracket, the wider thresholds buy you roughly $1,600 to $7,000 of extra room in that lower rate, depending on filing status. For a business owner deciding how much salary to take versus how much profit to leave in the company, that room is worth knowing about before you set the number.
What else changed in Rev. Proc. 2026-35
The release covers nearly 70 tax provisions. Beyond the brackets and the standard deduction, the ones that matter most to owners and families:
- Child tax credit: $2,300 per qualifying child in 2027, up $100 from $2,200.
- Estate tax basic exclusion: $15.48 million per person in 2027, up from $15 million in 2026. A married couple can now shelter $30.96 million between them, and the exemption is portable between spouses. The generation-skipping transfer exemption rises to the same $15.48 million.
- Annual gift tax exclusion: $20,000 per recipient in 2027, up from $19,000. A married couple can give $40,000 per recipient per year without touching the lifetime exemption. Gifts to a non-citizen spouse rise to $201,000.
- SALT cap: $40,804 in 2027, up from $40,400 in 2026. The cap gets a special 1% annual adjustment rather than the general inflation adjustment, and it is scheduled to revert to $10,000 in 2030.
- Alternative minimum tax exemption: $93,000 for unmarried individuals and $144,700 for joint filers in 2027.
- Capital gains: the 0% long-term capital gains threshold rises to $51,050 for single filers and $102,100 for joint filers. The 15% band’s ceiling rises as well.
- Personal exemptions: still zero in 2027.
One thing that did not come with this release: the 2027 401(k), 403(b), and IRA contribution limits. The IRS had not announced them as of November 6, 2026, and they arrive in a separate release. Do not plan your 2027 retirement contributions off projected numbers — wait for the official announcement.
What this means for your 2026 return: nothing — and that is the trap
The most common mistake after a release like this is applying the new numbers to the wrong year. The 2027 brackets and standard deduction apply to income earned from January 1 through December 31, 2027. The return you file in April 2027 uses the 2026 figures: standard deduction $16,100 single / $32,200 joint, and the 2026 bracket thresholds in the tables above.
So why should a business owner care in November 2026? Because the decisions that change your 2026 tax bill have to happen before December 31, and the 2027 figures tell you what the other side of that decision looks like. If you are weighing whether to accelerate income into 2026 or defer it into 2027, you now know both years’ brackets. If you are setting your S-corp salary, you know the 2027 thresholds your 2027 salary will face. The release is a planning document, not a filing document — and the planning window closes in about seven weeks.
The owner-planning table: 2026 vs. 2027
| Decision | 2026 figure | 2027 figure | What to do now |
|---|---|---|---|
| Standard deduction (joint) | $32,200 | $33,200 | If you are close to the itemize-or-standard line, the extra $1,000 of standard deduction in 2027 may tip the balance — bunch deductible expenses into 2026 if itemizing wins this year |
| Top of the 22% bracket (joint) | $211,400 | $218,250 | About $6,850 more taxable income stays in the 22% bracket in 2027 — useful when timing a bonus or a sale |
| Top of the 24% bracket (joint) | $403,550 | $416,650 | Roughly $13,100 of extra room before the 32% rate |
| 37% rate starts (joint) | $768,700 | $793,650 | High earners get about $24,950 more room before the top rate |
| SALT cap | $40,400 | $40,804 | Small change, but it feeds the pass-through entity tax decision below |
| Annual gift exclusion | $19,000 | $20,000 | Year-end gifts at the 2026 limit now; plan 2027 gifts at $20,000 per recipient |
| Estate exclusion | $15,000,000 | $15,480,000 | Succession and trust moves can use the higher 2027 figure |
| Child tax credit | $2,200 | $2,300 | Minor, but it affects withholding estimates for 2027 |
The practical takeaway: if your income is lumpy — a big client payment, a property sale, a bonus — the 2027 brackets give you slightly more room at every level. Deferring income from late December 2026 into January 2027 is worth a few hundred dollars more than it would have been before this release, because the deferred income lands in wider brackets. The effect is small, but on a $50,000 payment it can be the difference between the 22% and 24% rate on part of it.
Five moves to make before December 31, 2026
These are the moves that die on December 31. Miss the date and the 2026 benefit is gone, whatever the 2027 numbers say.
1. Put equipment in service — Section 179 and bonus depreciation
Equipment must be placed in service by December 31, 2026 to count for 2026. Section 179 lets you expense up to $2,560,000 of qualifying equipment, phasing out above $4,090,000 of total purchases. And 100% bonus depreciation is now permanent, so qualifying property gets full first-year expensing without the old phase-down schedule. The order of operations matters: buy it, install it, and use it before year-end — a purchase order alone does not count. For the full limits and what qualifies, see our Section 179 deduction guide for 2026 and the 100% bonus depreciation breakdown.
2. Fund the solo 401(k) — but first, make sure it exists
Employee deferrals for a solo 401(k) must come out of 2026 pay, and the plan itself must exist by December 31, 2026. The 2026 elective deferral limit is $24,500, or $32,500 if you are 50 or older. If you have not set up the plan yet, you still have time — but the account has to be open before the year ends, not just funded later. Employer contributions can wait until your filing deadline, but the plan’s existence cannot. Details are in our solo 401(k) deadline guide.
3. Run the S-corp salary through payroll
If you operate as an S-corp, your reasonable salary has to run through payroll in 2026 to count for 2026. You cannot reclassify a December distribution as salary after the fact. This is also the moment to revisit the salary-versus-distribution split with the 2027 brackets in hand: the wider 22% and 24% brackets mean a slightly higher salary in 2027 costs a little less in marginal tax than the same salary would have cost in 2026, which narrows — but does not erase — the case for keeping salary low.
4. Time your cash-basis income and expenses
Cash-basis businesses control their 2026 number until the last day of the year: pay deductible bills now, hold off invoicing until January if you want income in 2027, or pull invoices forward if you want income in 2026. The 2027 brackets make deferral slightly more attractive than it was, because the deferred income lands in wider brackets. But do not defer income you need for cash flow, and remember that Q4 estimated taxes are due January 15, 2027 regardless of which year the income lands in. Our Q4 2026 estimated tax guide has the payment dates and the safe-harbor rules.
5. Do not forget the paperwork deadlines that follow
Some moves can wait, and knowing which ones saves you a panicked December. SEP-IRAs can be opened and funded up until your filing deadline, including extensions. But 1099-NEC and W-2 forms are due February 1, 2027 (January 31 falls on a Sunday), and the 1099 reporting threshold is now $2,000 — lower than the old $600 in practice for many payers under the new rules, so check your vendor list now rather than in January.
The SALT cap and the pass-through entity tax question
The SALT cap rises to $40,804 in 2027 from $40,400 in 2026, with the 30% phase-down above $500,000 of modified adjusted gross income and a $10,000 floor. It reverts to $10,000 in 2030. That is a small move, but it interacts with a bigger decision: the pass-through entity tax (PTET) workaround, which lets owners of S-corps and partnerships in 36 states deduct state taxes at the entity level, bypassing the cap entirely. The PTET survived the One Big Beautiful Bill intact, including the House’s proposed restriction on specified service trades or businesses, which was dropped from the final law.
The decision is a math problem, not a loyalty test. If your state income tax bill is well above the cap — say $50,000 or $100,000 — the PTET election is usually worth the paperwork, and most states have an election deadline early in the year (often March 15-style deadlines that owners miss). If your state tax is close to the cap, the extra $404 of cap room in 2027 barely moves the needle, and the PTET’s own compliance cost may not be worth it. Run both numbers with your CPA before the state election deadline, and remember the election is state by state — there is no federal form for it.
Gift and estate moves before year-end
The gift exclusion rising to $20,000 per recipient in 2027 is a small number with a big planning use. A married couple with three children can move $120,000 a year out of their taxable estate — $40,000 per child — without touching the $15.48 million lifetime exemption and without filing a gift tax return. The 2026 limit is $19,000 per recipient ($38,000 per couple), so if you have gifts planned for December, make them at the 2026 limit and plan the 2027 gifts at the new figure.
The estate exclusion itself — $15.48 million per person, $30.96 million per couple — matters to far fewer people, but if you are in that range, the $480,000 increase is real money: at the 40% estate tax rate, it shelters about $192,000 of tax. The exclusion is portable between spouses, and the generation-skipping transfer exemption rises to the same figure. Two House bills would restore the old energy-efficient building deduction and have nothing to do with this — do not confuse the two.
What did not change, and what is still pending
A few things to keep straight so you do not plan off the wrong assumption:
- Tax rates are unchanged. The seven rates are the same as 2026. Anyone telling you the IRS “cut taxes” for 2027 is describing inflation indexing, not a rate cut.
- 401(k), 403(b), and IRA limits for 2027 are not yet announced. The IRS releases those separately. The 2026 limits still apply to contributions you make this year.
- Personal exemptions remain zero. The One Big Beautiful Bill did not restore them.
- The SALT cap reverts to $10,000 in 2030 unless Congress acts. The 2027 figure is a waypoint, not a permanent level.
- State taxes are separate. Every number in this article is federal. Your state’s brackets, standard deduction, and SALT treatment follow state law, and several states have decoupled from the federal figures.
Frequently Asked Questions
When do the 2027 tax brackets take effect?
They apply to income earned from January 1 through December 31, 2027. You will use them on the tax return you file in early 2028. The return you file in April 2027 uses the 2026 brackets and the 2026 standard deduction.
What is the standard deduction for 2027?
$16,600 for single filers and married filing separately, $33,200 for married filing jointly and surviving spouses, and $24,925 for heads of household. Those are increases of $500, $1,000, and $775 over 2026.
Did the IRS change the tax rates for 2027?
No. The seven marginal rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — are exactly the same as 2026. Only the income thresholds moved, up about 3.2% to account for inflation.
What is the top tax bracket for 2027?
The 37% rate starts at $661,375 of taxable income for single filers, $793,650 for married couples filing jointly, and $661,350 for heads of household. In 2026 those figures were $640,600, $768,700, and $640,600.
How much will the new brackets save me?
For most people, a few hundred dollars. A single filer with $100,000 of taxable income saves about $171 versus the 2026 brackets; a married couple with $150,000 saves about $341. The real benefit is bracket creep protection — your raise does not push as much income into a higher rate as it would have without indexing.
Have the 2027 401(k) limits been announced?
Not yet. As of November 6, 2026, the IRS had not released the 2027 limits for 401(k), 403(b), or IRA contributions. They come in a separate announcement. Do not plan 2027 contributions off projected figures.
This article is general information, not professional tax advice. Tax law changes frequently and your situation may differ — check current IRS guidance or talk to a CPA before acting on any of these figures. All figures are from IRS Revenue Procedure 2026-35, announced November 5, 2026.