# Tax thresholds rise for 2027 under IRS inflation indexing

URL: https://www.financialadvsr.com/article/tax-thresholds-rise-for-2027-under-irs-inflation-a85208
Published: November 7, 2026
By: Nora Kessler, Practice & Technology Correspondent
Section: News
Publisher: Financial ADVSR (https://www.financialadvsr.com)

Financial Planning reported the IRS release of tax year 2027 inflation adjustments, which raise brackets, deductions and credits while leaving the seven federal rates unchanged.

Financial Planning reported on Thursday, November 5, 2026, that the Internal Revenue Service had released its annual inflation adjustments for tax year 2027. The IRS release, numbered IR-2026-133, covers close to 70 provisions, from the rate schedules to the standard deduction and other tax figures. ThinkAdvisor also reported the announcement the same day, presenting the figures as the new tax numbers for 2027.

The full details appear in Revenue Procedure 2026-35, according to the IRS. The seven federal income tax rates, which run from 10% to 37%, are unchanged. Only the income thresholds at which each rate applies have moved. The Journal of Accountancy reported that the top 37% bracket now begins above $661,375 for single filers and above $793,650 for joint filers.

The Journal of Accountancy also reported the standard deduction figures. For married couples filing jointly, it rises to $33,200, up $1,000 from 2026. For single filers and married couples filing separately, it rises to $16,600, up $500. For heads of household, it rises to $24,925, up $775. The same report gave the alternative minimum tax exemption as $93,000 for unmarried filers and $144,700 for married couples filing jointly.

Several credits and exclusions also moved. The Journal of Accountancy reported that the child tax credit rises to $2,300, up $100, with up to $1,800 of that amount refundable. It reported that the annual gift tax exclusion rises to $20,000 from $19,000. It also reported that the estate tax basic exclusion rises to $15.48 million for 2027 decedents, from $15 million. That figure is an exemption amount for estates, not a measure of assets under management. Conservative Daily News reported that the Section 179 expensing limit rises to $2.64 million from $2.56 million, and that the health flexible spending account salary-reduction limit rises to $3,500, up $100.

Forbes reported that the adjustments use chained CPI averaged over September 2025 through August 2026, producing an increase of about 3.2%, compared with 2.7% the prior year. Forbes also noted that some amounts are set by statute and are not indexed. Those include the $6,000 senior deduction, the $25,000 cap on the no-tax-on-tips deduction and the $12,500 cap on the overtime deduction.

CNBC framed the release against household cost pressure. Citing Bureau of Labor Statistics data, it reported that consumer prices rose 3.7% year over year in September 2026. Ustax.tools listed the prior-year figures as coming from Revenue Procedure 2025-32, released on October 9, 2025, which is the baseline the 2027 changes are measured against.

Conservative Daily News reported that IRS chief executive Frank J. Bisignano said taxpayers would continue to benefit as credits and deductions rise with the adjustment. The Journal of Accountancy reported that the adjustments generally apply to returns filed in 2028. Yahoo Finance also covered the release, though one of its pieces gave the release day as Wednesday, while the IRS release itself is dated Thursday, November 5.

Key facts:
- Top 37% bracket begins above $661,375 for single filers and $793,650 for joint filers, according to the Journal of Accountancy.
- Standard deduction is $33,200 for joint filers, $16,600 for single and married filing separately, and $24,925 for heads of household.
- Annual gift tax exclusion rises to $20,000 from $19,000, according to the Journal of Accountancy.
- Estate tax basic exclusion rises to $15.48 million for 2027 decedents, up from $15 million.

Why it matters: Advisors who model taxes for clients will need to update bracket thresholds, deduction amounts and gift and estate figures before running 2027 projections. Because the adjustments generally apply to returns filed in 2028, planning for the 2027 tax year should use the new numbers while keeping in mind that some statutory amounts are not indexed.

Sources:
- Financial Planning: https://www.financial-planning.com/news/irs-sets-inflation-adjustments-for-tax-year-2027
- ThinkAdvisor: https://www.thinkadvisor.com/2026/11/05/13-new-tax-numbers-to-know-for-2027/
- irs.gov: https://www.irs.gov/newsroom
- journalofaccountancy.com: https://www.journalofaccountancy.com/news/2026/nov/irs-announces-inflation-adjustments-for-tax-year-2027/
- finance.yahoo.com: https://finance.yahoo.com/personal-finance/taxes/article/irs-announces-2027-income-tax-brackets-heres-whats-changing-180327922.html
- conservativedailynews.com: https://conservativedailynews.com/2026/11/irs-lifts-2027-tax-brackets-and-standard-deduction-for-inflation/
- finance.yahoo.com: https://finance.yahoo.com/economy/policy/articles/irs-adjusts-2027-tax-brackets-214926645.html
- cnbc.com: https://www.cnbc.com/2026/11/05/2027-federal-tax-brackets.html