The Internal Revenue Service (IRS) announced higher tax deductions, credits and estate exclusions for 2027, with IRS CEO Frank J. Bisignano saying taxpayers “will continue to benefit from the Working Families Tax Cuts.”
The WFTC refers to the federal tax legislation that provides or extends tax benefits for individuals, families and businesses.
The agency announced the adjustments in a press release Thursday, covering almost 70 tax provisions. The changes generally apply to tax returns filed in 2028, with details published in Revenue Procedure 2026-35.
Working Families Tax Cuts And 2027 Tax Changes
Bisignano said the adjustments will increase tax benefits for individuals and businesses, including the standard deduction, Child Tax Credit and the amount businesses can expense.
For 2027, the standard deduction will rise to $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household.
For tax year 2027, the top individual income tax rate will remain 37%, applying to income above $661,375 for single filers and $793,650 for married couples filing jointly. The maximum Child Tax Credit will increase by $100 to $2,300, with up to $1,800 refundable.
IRS Raises Estate, Gift And Business Limits
The basic estate tax exclusion will increase to $15.48 million for estates of people who die in 2027, up from $15 million in 2026. The annual gift tax exclusion will rise to $20,000 per recipient, while the exclusion for gifts to a spouse who is not a U.S. citizen will reach $201,000.
The Section 179 business-expensing limit will increase to $2.64 million, compared with $2.56 million in 2026. The maximum Earned Income Tax Credit for qualifying taxpayers with at least three children will rise to $8,496 from $8,231.
2027 Adjustments Follow Previous Increases
The new standard deduction amounts follow 2026 limits of $16,100 for single filers and $32,200 for married couples filing jointly. The estate tax exclusion also rises from the 2026 level of $15 million.
Other 2027 increases include the health flexible spending account limit of $3,500, up from $3,400, and the monthly transportation benefit limit of $350, up from $340.
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