AI Generated Image
See how your income tax bracket could change for 2027
CBS News • • world
Key Points:
- Federal tax brackets are projected to increase by 3.2% in 2027, allowing Americans to earn more before being taxed at higher rates, according to Bloomberg Tax estimates.
- The IRS adjusts tax brackets annually for inflation to prevent bracket creep, with the 2027 adjustment expected to be higher than the 2.7% increase seen in the current tax year.
- The inflation adjustment is based on the chained Consumer Price Index, though Bloomberg Tax used an 11-month average due to missing October 2025 data from the government shutdown.
- Rising inflation in 2026, partly driven by higher fuel prices linked to the Iran war, has contributed to the larger projected increase in tax brackets.
- The standard deduction is also expected to rise in 2027, reaching $33,200 for married couples filing jointly and $16,600 for single filers, up from $31,500 and $15,750 respectively in 2026.
