Many tax, expensing, and penalty figures are adjusted annually for cost-of-living increases. These 2027 inflation-adjusted tax numbers are Thomson Reuters estimates. The IRS will publish official figures later this year.
Because of the government shutdown in 2025, the Bureau of Labor Statistics failed to publish a consumer price index number for October 2025. Based on TR’s interpretation of IRC § 1(f), we estimated these 2027 numbers using the 11 months of published BLS CPI numbers from September 2025 through August 2026.
For the projected 2027 adjustments for key
- transfer tax and foreign items, see here,
- expensing and accounting method limitations, see here,
- health, charitable, compliance, and other specialty items, see here,
- civil penalties, see here, and
- individual tax items, see here
Below are some highlights for 2027:
For married individuals filing joint returns and surviving spouses
- $0 – $25,600: 10% of taxable income
- Over $25,600 but not over $104,050: $2,560.00 plus 12% of the amount over $25,600
- Over $104,050 but not over $218,250: $11,974.00 plus 22% of the amount over $104,050
- Over $218,250 but not over $416,650: $37,098.00 plus 24% of the amount over $218,250
- Over $416,650 but not over $529,100: $84,714.00 plus 32% of the amount over $416,650
- Over $529,100 but not over $793,650: $120,698.00 plus 35% of the amount over $529,100
- Over $793,650: $206,583.50 plus 37% of the amount over $793,650
For single individuals (other than heads of households and surviving spouses)
- $0 – $12,800: 10% of taxable income
- Over $12,800 but not over $52,025: $1,280.00 plus 12% of the amount over $12,800
- Over $52,025 but not over $109,125: $5,987.00 plus 22% of the amount over $52,025
- Over $109,125 but not over $208,325: $18,549.00 plus 24% of the amount over $109,125
- Over $208,325 but not over $264,550: $42,357.00 plus 32% of the amount over $208,325
- Over $264,550 but not over $661,375: $60,349.00 plus 35% of the amount over $264,550
- Over $661,375: $199,237.75 plus 37% of the amount over $661,375
For heads of household
- $0 – $18,250: 10% of taxable income
- Over $18,250 but not over $69,650: $1,825.00 plus 12% of the excess over $18,250
- Over $69,650 but not over $109,100: $7,993.00 plus 22% of the excess over $69,650
- Over $109,100 but not over $208,300: $16,672.00 plus 24% of the excess over $109,100
- Over $208,300 but not over $264,550: $40,480.00 plus 32% of the excess over $208,300
- Over $264,550 but not over $661,350: $58,480.00 plus 35% of the excess over $264,550
- Over $661,350: $187,031.50 plus 37% of the excess over $661,350
For marrieds filing separate returns
- $0 – $12,800: 10% of taxable income
- Over $12,800 but not over $52,025: $1,280.00 plus 12% of the excess over $12,800
- Over $52,025 but not over $109,125: $5,987.00 plus 22% of the excess over $52,025
- Over $109,125 but not over $208,325: $18,549.00 plus 24% of the excess over $109,125
- Over $208,325 but not over $264,550: $42,357.00 plus 32% of the excess over $208,325
- Over $264,550 but not over $396,825: $60,349.00 plus 35% of the excess over $264,550
- Over $396,825: $106,645.25 plus 37% of the excess over $396,825
For estates and trusts
- Less than $3,400: 10% of taxable income
- Over $3,400 but not over $12,100: $340.00 plus 24% of the excess over $3,400
- Over $12,100 but not over $16,500: $2,428.00 plus 35% of the excess over $12,100
- Over $16,500: $3,968.00 plus 37% of the excess over $16,500
Standard deductions. The basic standard deduction for 2027 will be:
- Joint return or surviving spouse: $33,200 ($32,200 for 2026)
- Single (not head of household or surviving spouse): $16,600 ($16,100 for 2026)
- Head of household (HOH): $24,900 ($24,150 for 2026)
- Married filing separate return (MFS): $16,600 ($16,100 for 2026)
Dependents. For an individual who can be claimed as a dependent on another’s return, the basic standard deduction for 2027 will be $1,400 ($1,350 in 2026), or $500 ($450 in 2026) plus the individual’s earned income, whichever is greater. However, the standard deduction may not exceed the regular standard deduction for that individual.
Older and blind taxpayers. For tax years 2025–2028, individuals age 65 or older can claim a new $6,000 senior deduction. The deduction is reduced by 6% of any excess of the taxpayer’s modified adjusted gross income (MAGI) above $75,000 (single) or $150,000 (joint).
- For 2027, the additional deduction for a married taxpayer (or surviving spouse) who is over 65 or blind will be $1,700 ($1,650 in 2026).
- For a single taxpayer or head of household who is over 65 or blind, the additional standard deduction for 2027 will be $2,100 ($2,050 in 2026).
Exemption amount. While the dependency exemption deduction under IRC § 151 was reduced to zero from 2018 through 2025, this exemption amount is used for other purposes of the Code, such as who is a qualifying relative for family credit purposes, and eligibility for head-of-household status. For 2027, this amount is $5,400 ($5,300 in 2026).
Capital gains. For 2027, the capital gains tax rates will be as follows:
The 0% capital gains rate applies to adjusted net capital gain of up to:
- Joint returns and surviving spouses: $102,100 ($98,900 in 2026)
- Single filers and married taxpayers filing separately: $51,050 ($49,450 in 2026)
- Heads of household: $68,350 ($66,200 in 2026)
- Estates and trusts: $3,400 ($3,300 in 2026)
The 15% capital gains tax rate applies to adjusted net capital gain over the amount subject to the 0% rate, and up to:
- Joint returns and surviving spouses: $633,600 ($613,700 in 2026)
- Married taxpayers filing separately: $316,800 ($306,850 in 2026)
- Heads of household: $598,400 ($579,600 in 2026)
- Single filers: $563,200 ($545,500 in 2026)
- Estates and trusts: $16,750 ($16,250 in 2026)
The 20% capital gains tax rate applies to adjusted net capital gain over the above 15% maximum amounts.
Kiddie tax. Under the kiddie tax rules, the first $1,350 of a child’s income (representing the standard deduction) is tax free. The next $1,350 is taxed at the child’s rate. Amounts above the sum of these two amounts are taxed at the estates and trusts rates. As a result, for 2027 a child’s unearned income above $2,800 ($2,700 in 2026) will be taxed at the estates and trusts rates if those rates result in a higher tax than the tax the child would otherwise pay on the income.
However, a parent can elect to include a child’s income on the parent’s return for 2027 if the child’s income is more than $1,400 and less than $14,000 ($1,350 and $13,500 in 2026).
AMT exemption for child subject to kiddie tax. Note that no special exemption amount applies through tax year 2027. (IRC § 55(d)(4)(A)(iii) and IRC § 59(j))
AMT exemption amounts. For 2027, the AMT exemption amounts will be:
- Joint returns or surviving spouses — $144,700 ($140,200 in 2026)
- Unmarried individuals (other than surviving spouses) — $93,000 ($90,100 in 2026)
- Married individuals filing separate returns — $72,350 ($70,100 in 2026)
- Estates and trusts — $32,500 ($31,400 in 2026)
For 2027, the excess taxable income above which the 28% tax rate applies will be $126,250 for married persons filing separately ($122,250 in 2026), and $252,500 for joint returns, unmarried individuals and estates and trusts ($244,500 in 2026).
For 2027, the amounts used under IRC § 55(d)(3) to determine the phaseout of the AMT exemption amounts will be:
- Joint returns or surviving spouses — $1,032,400 ($1,000,000 in 2026)
- Unmarried individuals (other than surviving spouses) — $516,200 ($500,000 in 2026)
- Married filing separate returns — $516,200 ($500,000 in 2026)
- Estates and trusts — $108,200 ($104,800 in 2026)
Income-based limitations on § 199A qualified business income deduction. For 2027, taxpayers with taxable income above $208,300 for single and head of household returns, $416,650 for joint filers, and $208,325 for married filing separate returns are subject to certain limitations on the IRC § 199A deduction. The 2026 amounts were $201,750, $403,550, and $201,750.
Excess business loss disallowance rule. Under IRC § 461(l), an excess business loss for the tax year is the excess of aggregate deductions of the taxpayer attributable to the taxpayer’s trades and businesses, over the sum of aggregate gross income or gain of the taxpayer plus a threshold amount. For 2027, the threshold amount is $528,000 for married individuals filing jointly ($512,000 in 2026) and $264,000 for other individuals ($256,000 in 2026).
Note: The base year used to calculate these figures was reset by the 2025 Tax Act to 2024.
Educator expenses. For 2027, eligible elementary and secondary school teachers can claim an above-the-line deduction for up to $350 per year of expenses paid for books and certain other supplies used in the classroom ($350 in 2026).
Interest exclusion for higher education. For 2027, the phase-out for excluding interest on U.S. savings bonds redeemed to pay qualified higher education expenses will begin at modified adjusted gross income (MAGI) above $105,100 ($157,600 on a joint return). For 2026, the corresponding figures were $101,800 and $152,650.
Qualified transportation fringe benefits. For 2027, an employee will be able to exclude up to $350 ($340 in 2026) a month for qualified parking expenses, and up to $350 a month ($340 in 2026) of the combined value of transit passes and transportation in a commuter highway vehicle.
Child tax credit. For 2027, the Child Tax Credit (CTC) is $2,300 per child ($2,200 for 2026).
Refundable child credit. The child credit is refundable to the extent of the greater of:
- 15% of earned income above $2,500, or
- For taxpayers with three or more qualifying children, the excess of the taxpayer’s social security taxes for the tax year over his or her earned income tax credit for the year. (IRC § 24(d))
However, the refundable portion of the child tax credit (ACTC) for any qualifying child can’t exceed $1,800 for 2027.
Earned income tax credit. For 2027, the maximum amount of earned income on which the earned income tax credit will be computed is:
- $8,960 for taxpayers with no qualifying children,
- $13,450 for taxpayers with one qualifying child, and
- $18,880 for taxpayers with two or more qualifying children.
For 2027, the phaseout of the allowable earned income tax credit will begin at:
- $18,730 for joint filers with no qualifying children ($11,220 for others with no qualifying children), and
- $32,170 for joint filers with one or more qualifying children ($24,660 for others with one or more qualifying children).
Observation: Taxpayers must use IRS tables to determine their earned income tax credit. While these tables are based on the inflation-adjusted figures set out above, because the credit under the tables is the same for everyone within a $50 range, there may be slight differences between the credit under the tables and the credit the taxpayer would determine using the inflation-adjusted figures.
The amount of disqualified income (generally investment income) a taxpayer may have before losing the entire earned income tax credit is $12,600 for 2027.
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