See how your income tax bracket could change for 2027

Federal tax brackets are projected to rise 3.2% next year, allowing Americans to earn more before their income is taxed at higher rates, according to new estimates from Bloomberg Tax.

The IRS adjusts its tax brackets each year for inflation, a step that can provide some financial relief to people whose income is taxed at lower rates. While the agency hasn't yet announced its new inflation-adjusted tax brackets — an announcement it usually makes in October or November — Bloomberg Tax on Friday issued its forecast for the 2027 tax changes. 

The analysis is based on the same inflation measure the IRS uses, known as the "chained Consumer Price Index." However, because the Department of Labor didn't report October 2025 inflation data due to the government shutdown at the time, Bloomberg Tax said it calculated the index using an 11-month average.

The IRS didn't immediately respond to a request for information about when it plans to announce its inflation-adjusted brackets for the upcoming tax season. 

Taxpayers are likely to see income thresholds for the seven IRS tax brackets increase by 3.2% next year, up from 2.7% for the current tax year, according to Bloomberg. The new brackets are important because they help taxpayers avoid so-called bracket creep, a hidden tax hike that can occur if income bands fail to keep pace with inflation.

The bigger inflation boost comes as prices have ticked higher in 2026, largely due to the Iran war, which has sent diesel to over $6 a gallon, a record, while gasoline remains above $4 a gallon. August's Consumer Price Index report showed that inflation rose by a higher-than-expected 3.4% on an annual basis.

Without annual inflation adjustments, workers who get a cost-of-living pay increase could be pushed into a higher tax bracket even though their standard of living hasn't changed. 

Under Bloomberg Tax's projections, the 12% bracket for married couples would cover taxable income from $25,601 to $104,050, with the top of that range rising $3,250 from 2026. Only the portion of a couple's income that falls within that range is taxed at 12%, with income below $25,601 taxed at the 10% rate.

Single filers will also see their tax brackets adjusted for 2027, according to Bloomberg Tax.

The standard deduction will also see an increase next year, rising to $33,200 for married couples filing jointly and $16,600 for single filers. That compares with $31,500 and $15,750, respectively, in the current tax year.