News of the Day November 9, 2026
IRS Releases Tax Inflation Adjustments for Tax Year 2027

On Thursday, the Internal Revenue Service (IRS) announced the tax year 2027 annual inflation adjustments for almost 70 tax provisions, including the tax rate schedules, standard deduction amounts and other tax changes. Revenue Procedure 2026-35 PDF provides details about these annual adjustments.

The tax year 2027 adjustments described below generally apply to tax returns filed in 2028. The tax items for tax year 2027 of greatest interest to most taxpayers include the following dollar amounts:

• Standard Deduction. For tax year 2027, the standard deduction increases to $33,200 for married couples filing jointly, up $1,000 from 2026. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,600 for tax year 2027, and for heads of households, the standard deduction will be $24,925.
• Marginal Rates: For tax year 2027, the top tax rate remains 37% for individual single taxpayers with incomes greater than $661,375 ($793,650 for married couples filing jointly). The other rates are:

  35% for incomes over $264,550 ($529,100 for married couples filing jointly);
  32% for incomes over $208,325 ($416,650 for married couples filing jointly);
  24% for incomes over $109,125 ($218,250 for married couples filing jointly);
  22% for incomes over $52,025 ($104,050 for married couples filing jointly);
  12% for incomes over $12,800 ($25,600 for married couples filing jointly).

  The lowest rate is 10% for incomes of single individuals with incomes of $12,800 or less ($25,600 for married couples filing jointly).

• The maximum amount of the child tax credit for 2027 is $2,300, an increase of $100 from 2026. For tax year 2027, the amount of credit that may be refundable is $1,800, also up $100 from 2026.
• Alternative Minimum Tax Exemption Amounts. For tax year 2027, the exemption amount for unmarried individuals is $93,000 and begins to phase out at $515,950 ($144,700 for married couples filing jointly for whom the exemption begins to phase out at $1,031,900).
• Estate Tax Exclusion. Estates of decedents who die during 2027 have a basic exclusion amount of $15,480,000, up from a total of $15,000,000 for estates of decedents who died in 2026. For calendar year 2027, the first $20,000 of gifts to any person are not included in the total amount of taxable gifts made during the year – up from $19,000 for calendar year 2026. 
• Annual Exclusion for Gifts. For calendar year 2027, the annual exclusion for gifts increases to $20,000, up from $19,000 for calendar year 2026. (However, the annual exclusion for gifts to a spouse who is not a citizen of the United States increases to $201,000 for calendar year 2027, up from $194,000 for calendar year 2026.)
• Expensing. For tax year 2027 taxpayers can expense up to $2,640,000 of section 179 property, up from $2,560,000 for tax year 2026. The limit for sport utility vehicles for tax year 2027 is $33,100, up from $32,000 for tax year 2026.
• Adoption Credits. The maximum credit allowed for adoptions for tax year 2027 is the amount of qualified adoption expenses up to $18,250, up from $17,670 for 2026. For tax year 2027, the amount of credit that may be refundable is $5,280.
• Employer-Provided Childcare Tax Credit. The WFTC significantly enhanced an important credit for employers; For tax year 2027, the maximum amount of employer-provided childcare tax credit rises to $515,943.67 up from $500,000 for 2026 ($619,132.40 if the employer is an eligible small business).