Projected IRS inflation adjustments for 2027 point to a larger bump in federal income tax brackets than taxpayers received for 2026. On Sept. 15, Nexstar outlets reported that Bloomberg Tax estimates a 3.2% increase in the 2027 brackets, compared with the 2.7% increase rolled out last year. The IRS has not yet published the official 2027 figures.
What Changed
According to the projection cited by abc27 and The Hill, all seven federal income tax brackets would rise for the 2027 filing season. The IRS typically releases those annual inflation adjustments in the fall. Last year, the agency announced the 2026 federal brackets in early October, and the same timing is expected again in a few weeks for 2027.
The purpose of the annual adjustment is to limit “bracket creep,” the phenomenon where inflation and nominal wage gains can push taxpayers into higher brackets even if their purchasing power has not meaningfully improved. If thresholds rise, more income stays in lower brackets before the next marginal rate applies.
The projection would move bracket thresholds as follows for single and married joint filers:
| Rate | 2026 single threshold | Projected 2027 single threshold | 2026 married joint threshold | Projected 2027 married joint threshold |
|---|---|---|---|---|
| 10% | $12,400 or less | $12,800 or less | $24,800 or less | $25,600 or less |
| 22% | Over $50,400 | Over $52,025 | Over $100,800 | Over $104,050 |
| 24% | Over $105,700 | Over $109,125 | Over $211,400 | Over $218,250 |
| 32% | Over $201,775 | Over $208,325 | Over $403,550 | Over $416,650 |
| 35% | Over $256,225 | Over $264,550 | Over $512,450 | Over $529,100 |
| 37% | Over $640,600 | Over $661,375 | Over $768,700 | Over $793,650 |
The reports also list the 12% bracket moving up from $12,400 for single filers and $24,800 for married couples filing jointly to $12,800 and $25,600, respectively.
Who Is Affected
If the IRS adopts something close to these projected thresholds, most wage earners would see at least some benefit because a slightly larger slice of income would be taxed at lower marginal rates. For high earners, the change does not lower the statutory rates themselves. Instead, it expands the amount of taxable income that can fall below the 32%, 35% and 37% cutoffs.
That matters most for households whose taxable income lands near a bracket boundary. A married couple with taxable income around $410,000, for example, could remain in the 32% bracket on more of that income under the projected 2027 thresholds than under the 2026 thresholds. A single filer near $650,000 of taxable income could likewise keep more income below the top 37% bracket if the projected figures become official.
The reports add that if brackets increase as expected, paychecks in 2027 would likely be somewhat larger because withholding tables generally adjust alongside the new thresholds.
The After-Tax Math
The projections are not final, but the mechanics are straightforward: when brackets widen, the tax savings come from the portion of income that avoids spilling into a higher rate.
Example: assume a married couple has $415,000 of taxable income.
- Under the 2026 thresholds cited in the reports, income above $403,550 falls into the 35% bracket.
- Under the projected 2027 thresholds, the 32% bracket would run up to $416,650.
- That means $11,450 of taxable income would be above the 32% threshold in 2026, versus none of it under the projected 2027 threshold.
On that slice alone, the difference is 3 percentage points, because the income would be taxed at 32% instead of 35%. That produces an illustrative tax difference of about $344 on $11,450 of income. Actual liability would depend on total taxable income, filing status and whatever official bracket figures the IRS ultimately releases.
Example: a single filer with $650,000 of taxable income would face the 37% rate on income above $640,600 under the 2026 figures, but only above $661,375 under the projected 2027 figures. That implies roughly $9,400 would be taxed at 37% under 2026 thresholds, versus none at that top rate if the 2027 projection became final and income stayed flat.
Moves to Discuss With Your Advisor
For affluent households, bracket changes are rarely a planning event by themselves, but they can affect year-end decisions around bonus timing, equity vesting, estimated taxes and charitable bunching. Households close to the 32%, 35% or 37% thresholds often review whether income recognition is likely to land in one year or the next.
Because these figures are still projections, the main near-term takeaway is not to treat them as final. It may be worth discussing with a CPA or financial planner whether withholding, estimated payments or cash-flow assumptions for 2027 need to be revisited after the IRS publishes the official adjustments.
What to Watch
The key next step is the IRS announcement expected in the fall. The reports note that Bloomberg Tax’s projections for 2026 were in line with the actual brackets, but this year’s 3.2% estimate remains unofficial until the agency publishes the final inflation adjustments.
Taxpayers will also want to watch for any related changes to other annually adjusted provisions, since the IRS typically updates a broader set of tax items at the same time as the brackets. For now, the only public figures in these reports are the projected bracket thresholds and the comparison to last year’s 2.7% increase. The tax filing deadline in 2027 is April 15, according to the reports.
Sources
- First reported How IRS’s 2027 tax brackets may change, according to new projections — abc27
- How IRS’s 2027 tax brackets may change, according to new projections — The Hill
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