The IRS Just Quietly Unlocked Bigger Tax Breaks for 2027 — Here's How Much More of Your Paycheck Stays Tax-Free
Standard deductions, tax brackets and the child tax credit are all getting inflation bumps for the 2027 tax year, the IRS announced this week — though the extra cash won't show up until you file in 2028.
The IRS has released its annual round of inflation adjustments for the 2027 tax year, raising the standard deduction, shifting income thresholds for every tax bracket, and boosting the child tax credit — changes that will shrink many Americans' tax bills, though not until returns filed in 2028.
The agency adjusted figures across nearly 70 tax provisions in the release, according to its own IRS newsroom announcement. For single filers and married couples filing separately, the standard deduction rises to $16,600, up $500 from 2026. Heads of household get $24,925, up $775, and married couples filing jointly will be able to claim $33,200.
What Actually Changes in Your Bracket
The seven federal income tax rates — from 10% to 37% — are staying put, but the income ranges that trigger each rate are moving up, meaning a given salary will generally land in a lower effective bracket than it would have under 2026's thresholds, according to the Journal of Accountancy's breakdown of the filing. The per-child tax credit also ticks up, from $2,200 to $2,300.
TAXPAYERS CONTINUE TO BENEFIT FROM THE WORKING FAMILIES TAX CUTS
That's the framing the IRS itself used in the headline of its release, tying this year's adjustments to the broader tax law Congress passed that extended and expanded several Trump-era tax provisions.
The changes are purely inflation indexing — a routine, legally required recalculation the IRS performs every fall — rather than a new piece of legislation, according to Kiplinger's analysis of the release. But with inflation still elevated, the dollar amounts involved are larger than in a typical year, meaning take-home pay could edge up slightly for many workers once new withholding tables are adopted.
None of this affects the return you're filing this coming spring, which still uses 2026's figures. The 2027 numbers apply to income earned throughout next year and won't actually show up on a tax return until early 2028. Financial advisers typically recommend using the fall release to start adjusting next year's withholding and retirement contributions well ahead of that filing season, rather than waiting until the numbers are old news.