IRS Sets the 2027 Tax Brackets and a $16,600 Standard Deduction: How to Update Your Budget

On November 5, 2026 the IRS published the tax year 2027 inflation adjustments for almost 70 provisions in Revenue Procedure 2026-35. The standard deduction rises to $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household, and every bracket threshold from 12% to 37% moves up. For a typical paycheck the change is small, a few dollars per pay period, and it is worth putting into your 2027 budget before January.

What the IRS announced on November 5, 2026

News release IR-2026-133 lists the figures of greatest interest to most taxpayers, and Revenue Procedure 2026-35 carries the full tables (IRS, IR-2026-133; Rev. Proc. 2026-35). The 2027 amounts generally apply to the tax returns filed in 2028.

• Standard deduction: $16,600 single and married filing separately (2026: $16,100), $33,200 married filing jointly (2026: $32,200), $24,925 head of household (2026: $24,150).
• Top rate: 37% stays, starting above $661,375 for single filers and $793,650 for joint filers.
• Child Tax Credit: up to $2,300 per child, $100 more than in 2026; the refundable part is $1,800.
• Health FSA: salary reductions up to $3,500, up $100; the carryover limit, where a plan allows it, is $700.
• Commuting: the monthly limit for qualified transit and qualified parking is $350, up $10.
• Unchanged: personal exemptions stay at $0.

2027 federal tax brackets for single filers

Each rate applies only to the slice of taxable income inside its band. The 2026 thresholds come from Revenue Procedure 2025-32 (IRS, Rev. Proc. 2025-32).

For married couples filing jointly the 2027 bands start at $25,600 (12%), $104,050 (22%), $218,250 (24%), $416,650 (32%), $529,100 (35%) and $793,650 (37%).

What it means for your take-home pay

Take a single filer with $70,000 of wages in both years, the standard deduction and no other income or credits. Federal income tax before credits works out from the IRS tables like this:

A married couple filing jointly with $140,000 of wages would owe $12,579 for 2027 against $13,140 for 2026, or $561 less, about $47 a month. State income tax, Social Security and Medicare follow their own rules, and a raise in 2027 can use up the difference. Your employer works out withholding from IRS Publication 15-T and your Form W-4 (IRS Publication 15-T), so the first January pay stub shows the real number.

A 15-minute budget update for 2027

1. Save your last 2026 pay stub and compare it with the first one in January. Put the new net amount into your income line so a change in withholding is not mistaken for overspending. How to make a budget covers the income line.
2. Check your W-4 after a life change. The IRS suggests checking withholding after a major life change, such as a new job, a marriage or the birth of a child. The IRS Tax Withholding Estimator runs the numbers with your pay stub at hand (IRS estimator).
3. Set your health FSA election during open enrollment: up to $3,500 for 2027. Plan it from what you actually spent on copays and prescriptions this year; a category for medical costs in your expense app gives you that total.
4. Move the gain to a goal. If your check grows by $20 to $50 a month, send that amount to an emergency fund or an extra debt payment before it disappears into everyday spending.
5. Pick a tool you will keep using. Our comparison of free budgeting apps shows what each one keeps free, and free vs paid budgeting apps explains what a subscription adds.

This article is general information about federal amounts published by the IRS. Your own tax depends on your income, deductions, credits and state, and a tax professional can confirm the figures for your situation.

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