The IRS announced new federal income tax brackets for the tax year 2027, which will be relevant for returns filed in 2028. The top tax rate of 37% will apply to individuals earning over $661,375 and married couples filing jointly earning $793,650 or more.
The updated brackets are as follows: 37% for incomes over $661,375; 35% for incomes over $264,550; 32% for incomes over $208,325; 24% for incomes over $109,125; 22% for incomes over $52,025; 12% for incomes over $12,800; and 10% for incomes of $12,800 or less. Additionally, the standard deduction will increase to $33,200 for married couples filing jointly and $16,600 for single filers.
These changes come as inflation pressures continue, with the consumer price index rising 3.7% in September 2026 compared to the previous year. The progressive nature of the U.S. tax system means that these adjustments could affect taxpayers' financial situations, particularly as they navigate rising living costs