The IRS has released updated tax brackets and deduction thresholds for the 2027 tax year, with the standard deduction rising to $16,600 for single taxpayers, $33,200 for married couples filing jointly and $24,925 for heads of households. These annual adjustments account for inflation and will apply to income earned during 2027, with taxpayers filing their returns in 2028.
The IRS increased the maximum child tax credit to $2,300 in 2027, up $100 from the previous year, while the refundable portion of the credit rose by $100 to $1,800. IRS CEO Frank Bisignano said the changes will boost support for American individuals and businesses through increased tax benefits including expanded credits for families and higher business expensing allowances.
The IRS also adjusted several other tax provisions for 2027. The annual exclusion for gift taxes will rise to $20,000, up from $19,000 in 2026, while the limit for gifts to a spouse who is not a U.S. citizen increases to $201,000 from $194,000. The estate tax exclusion for estates of decedents dying in 2027 will be $15,480,000, up from $15 million in 2026.
Qualifying taxpayers with three or more qualifying children who claim the Earned Income Tax Credit will see the maximum credit reach $8,496 in 2027, up from $8,231 the previous year. Credits for qualified adoption expenses are rising to $18,250 in 2027 from $17,670 last year, with the refundable portion set at $5,280.
For savers and families, these changes mean lower tax burdens next year through higher standard deductions and increased credits that reduce the amount of taxes owed on income and provide greater support for dependents.