Each year, the Internal Revenue Service (IRS) adjusts dollar amounts in the federal tax code for inflation. The adjustments cover tax rate schedules, the standard deduction, credits and many other limits. They set the figures that apply to a given tax year, so they matter to anyone who files a return or plans around these limits.
This page explains the tax year 2027 adjustments. All figures come from an IRS announcement dated Nov. 5, 2026 (IR-2026-133). Amounts can change from year to year, so the figures below describe tax year 2027 only.
What the annual adjustments are
The IRS announced the tax year 2027 adjustments for almost 70 tax provisions. Revenue Procedure 2026-35 is the document that gives the details. The IRS says the adjustments generally apply to tax returns filed in 2028.
The IRS also ties the adjustments to the Working Families Tax Cuts, which it abbreviates as WFTC. According to the IRS, the WFTC made permanent some earlier provisions and enhanced others. Some of the amounts below come from those provisions.
Standard deduction and tax rates
The standard deduction is a set dollar amount that taxpayers can subtract from income. For tax year 2027, the IRS says it is $33,200 for married couples filing jointly. It is $16,600 for single taxpayers and for married individuals filing separately. For heads of households, it is $24,925.
The tax rate schedule sets seven rates, each starting at an income level. The table below shows the 2027 levels for single filers and for married couples filing jointly. The IRS says the top rate stays at 37%.
Credits for families and workers
A tax credit reduces the tax a person owes. Some credits are partly refundable, which means a portion can be paid out even if it is larger than the tax owed. The IRS lists several family and worker credits for 2027.
The maximum child tax credit is $2,300, and up to $1,800 of it may be refundable. The maximum Earned Income Tax Credit is $8,496 for qualifying taxpayers with three or more qualifying children. Revenue Procedure 2026-35 has a table with the maximums, income thresholds and phase-outs for other categories.
The maximum adoption credit is the amount of qualified adoption expenses up to $18,250, and $5,280 of the credit may be refundable. The maximum employer-provided childcare tax credit is $515,943.67, or $619,132.40 if the employer is an eligible small business.
Estate, gift, business and other limits
The adjustments also reach taxes on large transfers of money. Estates of people who die during 2027 have a basic exclusion amount of $15,480,000. For calendar year 2027, the annual exclusion for gifts is $20,000 per person. The exclusion for gifts to a spouse who is not a U.S. citizen is $201,000.
The alternative minimum tax has its own exemption amounts. For unmarried individuals, the exemption is $93,000 and begins to phase out at $515,950. For married couples filing jointly, it is $144,700 and begins to phase out at $1,031,900.
For businesses, taxpayers can expense up to $2,640,000 of section 179 property. Expensing means deducting the cost of qualifying property. The limit for sport utility vehicles is $33,100.
Other limits tied to benefits and accounts also change. The monthly limit for the qualified transportation fringe benefit, and for qualified parking, is $350. The salary-reduction limit for health flexible spending arrangements is $3,500, and the maximum carryover for plans that allow it is $700. The foreign earned income exclusion is $137,300.
The IRS also lists Medical Savings Account limits. For self-only coverage, the plan’s annual deductible must be at least $3,000 and no more than $4,550, and the out-of-pocket maximum is $6,050. For family coverage, the deductible must be at least $6,050 and no more than $9,050, and the out-of-pocket limit is $11,050.
Items not adjusted for inflation
Not every amount rises with inflation. The IRS says some items are not adjusted, because of the law that governs them.
Personal exemptions stay at zero for 2027. The IRS says the Tax Cuts and Jobs Act of 2017 eliminated the personal exemption and the WFTC made that permanent. The IRS notes that this does not include the senior deduction the WFTC added.
The limitation on itemized deductions was eliminated for tax years 2018 through 2025, and the WFTC made that permanent. The IRS says the WFTC does limit the tax benefit of itemized deductions for taxpayers in the highest bracket, 37%.
The Lifetime Learning Credit income thresholds have not been adjusted for inflation for tax years beginning after Dec. 31, 2020. The credit phases out for modified adjusted gross income between $80,000 and $90,000, or between $160,000 and $180,000 for joint returns.