US IRS RAISES 2027 INCOME TAX BRACKETS, STANDARD DEDUCTIONS
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By Aishat Momoh. O.
The United States Internal Revenue Service (IRS) has announced higher federal income tax brackets and standard deductions for 2027, adjusting income thresholds to reflect inflation.
The changes, announced on Thursday, November 5, 2026, will apply to the 2027 tax year, with taxpayers expected to file their returns in 2028, according to CNBC.
Under the revised rates, the top federal income tax rate of 37 per cent will apply to individuals with taxable income exceeding $661,375 and married couples filing jointly with taxable income above $793,650.
The IRS also increased the income thresholds for the other six tax brackets, which range from 10 to 35 per cent.
The new individual federal income tax brackets for 2027 are:
- 10 per cent: Taxable income of $12,800 or less.
- 12 per cent: Taxable income above $12,800.
- 22 per cent: Taxable income above $52,025.
- 24 per cent: Taxable income above $109,125.
- 32 per cent: Taxable income above $208,325.
- 35 per cent: Taxable income above $264,550.
- 37 per cent: Taxable income above $661,375.
For married couples filing jointly, the corresponding income thresholds are $25,600, $104,050, $218,250, $416,650, $529,100 and $793,650.
The standard deduction, which reduces the amount of income subject to federal taxation, will also increase in 2027.
Married couples filing jointly will be able to claim $33,200, up from $32,200 in 2026, while single taxpayers will have a standard deduction of $16,600, compared with $16,100 in the current year.
The adjustments come as Americans contend with rising living costs, including housing, groceries, fuel and other household expenses.
According to the Bureau of Labour Statistics, the US Consumer Price Index rose by 3.7 per cent in September 2026 compared with the same period a year earlier, up from 3.4 per cent in August.
The IRS adjusts federal income tax thresholds annually based on inflation, using the Consumer Price Index to prevent taxpayers from moving into higher tax brackets solely because of rising prices.
The United States operates a progressive federal income tax system, meaning different portions of a taxpayer’s income are taxed at different rates rather than applying a single rate to the entire income.
The applicable tax bracket depends on a taxpayer’s filing status, which includes single, married filing jointly, married filing separately, head of household and qualifying surviving spouse.
CNBC also reported that the IRS had adjusted other tax provisions for 2027, including long-term capital gains thresholds, estate and gift tax exemptions, and eligibility requirements for the Earned Income Tax Credit.
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