Your First Look at 2027 Tax Brackets, Standard Deduction Amounts and More
Inflation continues to affect your tax bill—and Bloomberg Tax & Accounting has released its first look at what that could mean for taxpayers in 2027.
Bloomberg Tax & Accounting released its 2027 Projected U.S. Tax Rates, reflecting a roughly 3.2% inflation adjustment over 2026 amounts, compared with 2.7% from 2025. These adjustments increase deduction limitations, raise tax bracket thresholds, and bump up a number of other tax-related amounts.
This year’s calculations include an unusual wrinkle. The inflation adjustment for 2027 is based on C-CPI-U data from September 2025 through August 2026. Because the Bureau of Labor Statistics (BLS) did not publish an October 2025 C-CPI-U value due to the lapse in federal appropriations, Bloomberg Tax calculated its adjustment using an 11-month average rather than the usual 12 months.
The projections also reflect changes made under the One Big Beautiful Bill Act (OBBBA), including inflation adjustments to provisions affecting individuals, businesses, and pass-throughs.
How does that translate to dollars? Here’s a look at the projected numbers for the 2027 tax year, beginning January 1, 2027. These are not the tax rates and other numbers for 2026.
And remember: These are projections. The IRS has not yet announced the official inflation-adjusted amounts for 2027.
Tax Brackets
Here’s what the rates are expected to look like in 2027.
(Remember: For filing purposes, your marital status is determined as of the last day of the tax year—December 31—under state law. If you’re married on that day, you’re married. It’s not more complicated than that.)
Single Taxpayers
For single taxpayers, the 10% bracket is projected to apply to taxable income up to $12,800. The top 37% rate applies when taxable income exceeds $661,375.
Married Taxpayers Filing Jointly
For married taxpayers filing jointly and surviving spouses, the 10% bracket is projected to apply to taxable income up to $25,600, with the top 37% rate taking effect when taxable income exceeds $793,650.
Married Taxpayers Filing Separately
For married taxpayers filing separately, the 10% bracket is projected to apply to taxable income up to $12,800, and the top 37% rate applies when taxable income exceeds $396,825.
Heads Of Household
For heads of household, the 10% bracket is projected to apply to taxable income up to $18,250, and the top 37% rate applies when taxable income exceeds $661,350.
Trusts and Estates
Trusts and estates have a much more compressed tax schedule. For 2027, the 37% rate is projected to apply to taxable income above $16,500.
Top Marginal Tax Rates
Your marginal tax rate determines what you pay on the next dollar of income—it’s the highest ordinary income tax rate that applies to a portion of your taxable income.
For the 2027 tax year, the top federal income tax rate remains 37%. An additional net investment income tax (NIIT) of 3.8% may apply to certain investment income.
Remember that being “in” a particular tax bracket doesn’t mean all of your income is taxed at that rate. Federal income tax rates are progressive, meaning different portions of taxable income are taxed at different rates.
Capital Gains
If you hold assets for one year or less, any capital gain on sale or disposal is short-term and generally taxed at your ordinary income tax rate. If you hold assets for more than one year before disposing of them, your capital gain is long-term and generally taxed at preferential rates of 0%, 15%, or 20%. Exceptions apply to certain assets, including art and collectibles, as well as certain section 1250 gain related to depreciation.
The 0%, 15%, and 20% long-term capital gains rates will not change in 2027, but the income thresholds for those rates will.
Bloomberg Tax anticipates that the upper income limits for the 0% and 15% rates will be as follows:
For married taxpayers filing jointly and surviving spouses, the maximum zero-rate amount is projected at $102,100, and the maximum 15% rate amount is $633,600. For single taxpayers and other individuals, the corresponding amounts are $51,050 and $563,200, respectively. The 20% rate applies to adjusted net capital gain above the maximum 15% rate amount.
Personal Exemption Amounts
The Tax Cuts and Jobs Act (TCJA) eliminated personal exemptions through 2025, and OBBBA made that elimination permanent.
As a result, the personal exemption amount remains $0 in 2027.
Standard Deduction Amounts
The TCJA nearly doubled the standard deduction, and OBBBA made the higher standard deduction permanent.
Here’s what Bloomberg Tax projects for 2027:
The standard deduction is projected to be $33,200 for married taxpayers filing jointly and surviving spouses and $16,600 for single taxpayers and married taxpayers filing separately.
Note that for heads of household, Bloomberg’s literal calculation yields $24,925, but Bloomberg expects that the IRS may publish $24,950 due to rounding of the inflation-adjusted amount.
Bloomberg predicts that the standard deduction for an individual who may be claimed as a dependent by another taxpayer in 2027 cannot exceed the greater of $1,400 or $500 plus the individual’s earned income.
The additional standard deduction per person for the aged or the blind is projected to be $1,700. That amount increases to $2,100 if the individual is unmarried and not a surviving spouse.
Additional Deduction For Seniors
Under OBBBA, qualifying seniors may claim an additional $6,000 deduction. The temporary deduction is available to both itemizers and those who claim the standard deduction, and it is scheduled to expire after 2028.
This provision is sometimes called “no tax on Social Security.” However, it does not exclude Social Security benefits from federal income tax—it’s just an additional deduction.
The deduction begins to phase out once modified adjusted gross income exceeds $75,000 ($150,000 for joint filers). The deduction is reduced by 6% of the amount over those thresholds.
Qualifying Relative
The gross income limit for a qualifying relative is projected to be $5,450 in 2027. Bloomberg notes that the IRS may instead publish $5,400, depending on how it rounds the inflation adjustment.
Kiddie Tax
The kiddie tax can apply when a child has unearned income, such as interest, dividends, or capital gains. For 2027, the amount used to reduce net unearned income subject to the kiddie tax is projected to be $1,400. That same $1,400 amount is used for purposes of the election that allows some parents to report a child’s income on their own return. For 2027, one requirement for making that election is that the child’s gross income must be more than $1,400 but less than $14,000.
Child Tax Credit
In 2027, Bloomberg predicts the child tax credit will be $2,300. The amount used to determine the refundable portion of the child tax credit is projected to be $1,800.
Student Loan Interest
The maximum student loan interest deduction remains $2,500, but the income phaseout thresholds are projected to increase. For 2027, Bloomberg predicts the deduction will begin phasing out for taxpayers with modified adjusted gross income above $90,000 ($180,000 for joint returns) and will be fully phased out at $105,000 or more ($210,000 or more for joint returns).
Alternative Minimum Tax (AMT)
The AMT exemption is also subject to inflation adjustments. Bloomberg Tax anticipates the exemption amounts will be as follows in 2027:
The projected exemption amounts are $144,700 for married taxpayers filing jointly and surviving spouses, $93,000 for unmarried taxpayers, $72,350 for married taxpayers filing separately, and $32,500 for estates and trusts.
The exemptions begin phasing out at higher income levels. For married taxpayers filing jointly and surviving spouses, the phaseout is projected to begin at $1,031,900 and end at $1,321,300. For unmarried individuals, the corresponding amounts are $515,950 and $701,950.
Fringe Benefits—Transportation
For 2027, the monthly limitation for the qualified transportation fringe benefit for transportation in a commuter highway vehicle and for any transit pass is projected to be $350. The monthly limitation for qualified parking is also projected to be $350.
Education Expenses Of Elementary And Secondary School Teachers
In 2027, Bloomberg predicts the maximum deduction for eligible educator expenses will remain $350.
Health Savings Accounts (HSAs)
The IRS has already officially published HSA amounts for 2027, so they aren’t merely Bloomberg projections.
For 2027, the annual HSA contribution limits are $4,500 for self-only coverage and $9,000 for family coverage. For an HSA, a high-deductible health plan (HDHP) must have an annual deductible of at least $1,750 for self-only coverage or $3,500 for family coverage. Annual out-of-pocket expenses cannot exceed $8,700 for self-only coverage or $17,400 for family coverage.
Medical Savings Accounts (MSAs)
For 2027, an HDHP paired with a Medical Savings Account for self-only coverage is projected to have an annual deductible of at least $3,000 and no more than $4,550, with annual out-of-pocket expenses capped at $6,050. For family coverage, the annual deductible is projected to be at least $6,050 and no more than $9,050, with annual out-of-pocket expenses capped at $11,050.
Foreign-Earned Income Exclusion
For 2027, the foreign-earned income exclusion is projected to rise to $137,300. You can combine the exclusion with the foreign tax credit, but you cannot claim both for the same income—no double-dipping.
Section 199A Deduction
Sole proprietors and owners of pass-through businesses, including partnerships, S corporations, and many limited liability companies (LLCs), may be eligible for a deduction of up to 20% of qualified business income. The deduction, made permanent under OBBBA, remains subject to thresholds and phase-in amounts.
For 2027, Bloomberg Tax projects those amounts as follows:
For married taxpayers filing jointly, the threshold amount is projected to be $416,600, with a phased-in amount of $566,600. For all other taxpayers, except married taxpayers filing separately, the amounts are $208,300 and $283,300. Married taxpayers filing separately have projected amounts of $208,325 and $283,325.
The minimum deduction under the new OBBBA provision is projected to be $415. To qualify as an applicable taxpayer for that minimum, aggregate qualified business income from active qualified trades or businesses must be at least $1,030.
IRAs & Other Retirement Accounts
For 2027, Bloomberg projects the maximum deductible amount for IRA contributions at $7,500 for individuals under age 50. For those age 50 or older, that amount increases by $1,100.
For active participants in certain employer retirement plans, the applicable amount used to determine the IRA deduction phaseout is projected to be $83,000 for single and other eligible taxpayers and $133,000 for married taxpayers filing jointly. For spouses who are not active participants, the applicable amount is projected to be $250,000.
Charitable Distributions
A qualified charitable distribution (QCD) allows eligible taxpayers to transfer funds directly from an IRA to a qualified charity. These amounts can count toward required minimum distributions (RMDs), and the donated amount is generally excluded from taxable income.
For 2027, the total amount of QCDs that may be excluded from gross income is projected to increase to $114,000. Taxpayers may also make a one-time election to make a QCD to certain split-interest entities. That amount is projected to increase to $57,000 in 2027.
Roth IRAs
Taxpayers who wish to contribute to a Roth IRA are subject to income phaseouts. In this context, phaseouts mean the eligible contribution amount decreases as income rises.
Bloomberg predicts that phaseouts will look like this in 2027:
For married taxpayers filing jointly, the phaseout is projected to run from $250,000 to $260,000. For single and other taxpayers, other than married taxpayers filing separately, the phaseout is projected to run from $158,000 to $173,000.
For married taxpayers filing separately, the range remains $0 to $10,000. However, a married individual filing separately who did not live with their spouse during the year may be eligible for the higher limits applicable to other taxpayers.
Distribution From Retirement Plan In Case Of Domestic Abuse
Tax law provides an exception to the additional tax on certain early retirement-plan distributions for victims of domestic abuse. For 2027, the amount that may be treated as an eligible distribution is projected to be limited to the lesser of $10,900 and 50% of the present value of the employee’s nonforfeitable accrued benefit under the plan.
Federal Estate Tax Exclusion
For estates of individuals who die in 2027, the federal estate tax basic exclusion amount is projected to increase to $15,480,000 per person. The generation-skipping transfer (GST) tax exemption is also projected to be $15,480,000.
Gift Tax Exclusion
The annual federal gift tax exclusion is projected to rise to $20,000 per recipient in 2027. This means you can generally give up to $20,000 to as many people as you want in 2027 without using any of your lifetime federal gift and estate tax exemption. If you and your spouse elect to split gifts, the amount effectively doubles to $40,000 per recipient.
The limit for gifts to a non-U.S. citizen spouse is projected to increase to $201,000 in 2027.
Information Reporting
OBBBA also significantly changed information reporting requirements. For payments made after December 31, 2025, the law increased the reporting threshold under section 6041 from $600 to $2,000, with the $2,000 amount indexed for inflation beginning in 2027.
For 2027, Bloomberg Tax projects that the threshold will increase to $2,100.
Section 6041 generally requires businesses to report certain payments made in the course of a trade or business. OBBBA also made a corresponding change to section 6041A, which applies to reporting certain payments for services. The changes are significant because the $600 threshold under section 6041 had remained unchanged for decades. Businesses will still need to pay attention to the applicable reporting rules and exceptions, but fewer payments should trigger an information reporting requirement.
More Information
Remember that these are projections. The IRS will publish the official 2027 tax brackets and other inflation-adjusted numbers later this year (and I’ll definitely post those numbers).
Because the BLS did not publish C-CPI-U data for October 2025, Bloomberg Tax calculated its projections using an 11-month average. Bloomberg also identifies several provisions for which the statutory rounding methodology yields one figure, but it believes the IRS may ultimately publish a different one. Still, the projected numbers can give you a head start on 2027 planning. The full Bloomberg Tax report is available here.
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