Single taxpayers will get a $16,600 standard deduction for 2027, while married couples filing jointly will get $33,200, as annual inflation adjustments raise federal income tax thresholds and several family tax credits.
The changes apply to tax year 2027, with returns generally filed in 2028, according to the IRS announcement released Nov. 5. They cover almost 70 provisions, including ordinary income brackets, the child tax credit and estate and gift exclusions.
Standard deductions rise for each filing status
The 2027 standard deduction rises by $500 for single filers and $1,000 for married couples filing jointly compared with 2026. Married people filing separately will also have a $16,600 standard deduction, while heads of household will have a $24,925 deduction.
The standard deduction reduces the income subject to federal income tax for taxpayers who claim it instead of itemizing. These amounts apply to 2027 income; taxpayers filing returns for 2026 generally use the 2026 amounts.
For older or blind taxpayers, the additional standard deduction will be $1,700, increasing to $2,100 for someone who is unmarried and not a surviving spouse. That additional amount is separate from the temporary deduction of up to $6,000 per qualifying taxpayer age 65 or older.
The separate senior deduction is available to eligible taxpayers who itemize as well as those who take the standard deduction. It begins phasing out above $75,000 of modified adjusted gross income for individual filers and $150,000 for joint filers, and is scheduled to expire after 2028. The Tax Foundation’s 2027 explainer notes that this deduction is not indexed for inflation.
Seven income tax rates remain in place
The federal rates remain 10%, 12%, 22%, 24%, 32%, 35% and 37%. Inflation adjustments change the taxable-income thresholds at which those rates apply.
The brackets are marginal: Moving into a higher bracket subjects the income within that bracket to the higher rate, rather than applying that rate to all income. The following thresholds come from Revenue Procedure 2026-35.
| Rate | Single filers | Married filing jointly | Heads of household |
|---|---|---|---|
| 10% | Up to $12,800 | Up to $25,600 | Up to $18,250 |
| 12% | Over $12,800 to $52,025 | Over $25,600 to $104,050 | Over $18,250 to $69,650 |
| 22% | Over $52,025 to $109,125 | Over $104,050 to $218,250 | Over $69,650 to $109,100 |
| 24% | Over $109,125 to $208,325 | Over $218,250 to $416,650 | Over $109,100 to $208,300 |
| 32% | Over $208,325 to $264,550 | Over $416,650 to $529,100 | Over $208,300 to $264,550 |
| 35% | Over $264,550 to $661,375 | Over $529,100 to $793,650 | Over $264,550 to $661,350 |
| 37% | Over $661,375 | Over $793,650 | Over $661,350 |
Married taxpayers filing separately use the same thresholds as single filers through the 32% bracket. Their 35% bracket ends at $396,825, with the 37% rate applying above that amount.
The Tax Foundation says inflation-adjusted parameters rise about 3.2% on average. The annual adjustments help limit bracket creep, in which inflation pushes nominal income into higher brackets without a corresponding increase in purchasing power. Federal indexing has used chained consumer prices since the 2017 Tax Cuts and Jobs Act.
Child and earned income credits increase
The maximum child tax credit rises to $2,300 per qualifying child, $100 more than in 2026. Up to $1,800 may be refundable, also an increase of $100. Eligibility and refundability depend on the applicable tax rules.
The maximum earned income tax credit will be $685 for qualifying taxpayers without qualifying children, $4,573 with one qualifying child, $7,552 with two, and $8,496 with three or more.
The income at which the maximum EITC is first reached will be $8,960 without qualifying children, $13,450 with one, and $18,880 with two or more. The credit then phases out as income rises.
| Qualifying children | Other eligible filing statuses: phaseout begins / ends | Married filing jointly: phaseout begins / ends |
|---|---|---|
| None | $11,210 / $20,164 | $18,730 / $27,684 |
| One | $24,660 / $53,277 | $32,170 / $60,787 |
| Two | $24,660 / $60,519 | $32,170 / $68,029 |
| Three or more | $24,660 / $65,002 | $32,170 / $72,512 |
Those phaseouts use adjusted gross income or earned income, whichever is greater. No EITC is allowed when the applicable investment income exceeds $12,600. Married taxpayers filing separately must satisfy special rules for separated spouses to qualify.
Capital gains and business income have separate thresholds
For long-term capital gains subject to the standard 0%, 15% and 20% rate structure, the maximum taxable income for the zero rate will be $51,050 for single filers, $102,100 for joint filers and $68,350 for heads of household.
The maximum taxable income for the 15% rate will be $563,200 for single filers, $633,600 for joint filers and $598,400 for heads of household. Amounts above those thresholds fall into the 20% bracket under that structure.
The 20% qualified business income deduction for eligible pass-through businesses remains permanent under the 2025 federal tax law. Income-based limitations begin phasing in at $208,300 for most nonjoint returns and are fully phased in at $283,300. For joint returns, the corresponding amounts are $416,600 and $566,600.
For married taxpayers filing separately, the business-deduction thresholds are $208,325 and $283,325. The phase-in ranges are $75,000 for nonjoint returns and $150,000 for joint returns.
Alternative minimum tax exemptions also rise
The alternative minimum tax uses a separate calculation of taxable income and exemptions. Taxpayers subject to it calculate their liability under both systems and pay the higher amount.
- Haines says Auburn is already stretched thin as rising costs threaten budget recovery
- Hochul signs six veterans laws covering tax benefits, accessibility and vehicle registrations
- Inside Government: Cayuga County Legislative Chair Johnathan Anna discusses budget, health costs
- Seneca County rejects $125K airport manager range, freezes supervisor pay as budget pressures loom
For 2027, the AMT exemption will be $93,000 for unmarried individuals and $144,700 for married couples filing jointly. The exemptions begin phasing out at $515,950 and $1,031,900, respectively, declining by 50 cents for each additional dollar of alternative minimum taxable income.
The AMT has rates of 26% and 28%. The higher rate applies to excess taxable income above $252,500 for most taxpayers, or $126,250 for married taxpayers filing separately. The separate-return exemption is $72,350.
Gift and estate exclusions increase
The annual gift exclusion rises to $20,000 per recipient in 2027, from $19,000 in 2026. The exclusion generally applies to gifts of present interests in property.
For gifts to a spouse who is not a U.S. citizen, the corresponding annual exclusion rises to $201,000 from $194,000. The basic estate and gift tax exclusion becomes $15.48 million, up from $15 million in 2026.
Other indexed benefits change while personal exemptions stay at zero
The maximum adoption credit will be $18,250, with up to $5,280 potentially refundable. The credit begins phasing out above $273,680 in modified adjusted gross income and is fully phased out at $313,680.
Employees contributing to health flexible spending arrangements will have a $3,500 salary-reduction limit. Plans that allow unused funds to carry over may permit up to $700. Monthly exclusions for qualified transportation benefits and qualified parking rise to $350 each.
Businesses may expense up to $2.64 million of qualifying Section 179 property, with that limit reduced when qualifying property placed in service exceeds $4.23 million. The separate limit for qualifying sport utility vehicles will be $33,100.
Personal exemptions remain at zero. The 2025 law made their elimination permanent, while preserving the separate temporary senior deduction. The new indexed amounts generally take effect for tax years beginning in 2027 and will be used on returns filed in 2028.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to news@fingerlakes1.com.