Looking ahead to 2027: what is new and what stays the same
Tax year 2027 is the year you report in 2028. The IRS has already published most of its amounts, so we show what moves, what stays put and what is still to come.
Prepared by Prem Tax and Accounting Corp. Last reviewed November 6, 2026. Figures as of November 6, 2026.
Tax year 2027 is the year you will report in 2028, and the IRS has already published most of its amounts. This look-ahead to 2027 tax planning shows what stays, what moves and what is still unannounced. We check each item with the Third-Lap Lookout, because 2027 is the third lap of four for several temporary deductions. The 2026 side of the story is in our 2026 figures.
- The seven rates, 10 to 37 percent, stay in place. The dollar brackets widen.
- 2027 is year three of four for the senior, tips, overtime and car-loan deductions (tax years 2025 to 2028). None of their amounts is indexed.
- The state and local tax (SALT) cap would be $40,804 for 2027. That is our arithmetic, and the IRS has not printed it.
- Not published as of November 6, 2026: 2027 401(k) and IRA limits, Medicare Part B premiums and surcharges, and mileage rates.
2026 compared with 2027
| Item | 2026 | 2027 | Status |
|---|---|---|---|
| Standard deduction, joint; single | $32,200; $16,100 | $33,200; $16,600 | Published |
| 37% bracket starts above, joint | $768,700 | $793,650 | Published |
| Child tax credit | $2,200 | $2,300 | Published |
| Annual gift exclusion | $19,000 | $20,000 | Published |
| SALT cap | $40,400 | $40,804 | Computed by us |
| Senior deduction | $6,000 | $6,000 | Fixed by law |
Sources: Rev. Proc. 2025-32, Rev. Proc. 2026-35, IR-2026-133 and Public Law 119-21.
An invented example
A single filer has $120,000 of taxable income. The 2026 tax is $17,966 plus 24 percent of $14,300, which is $21,398. The same income in 2027 gives $18,549 plus 24 percent of $10,875, which is $21,159. That is $239 less, because the brackets widened.
The Third-Lap Lookout
- Name your lap: which of the four temporary deductions do you use, and is 2027 your third year?
- Tag each number as published, computed or not yet published.
- Check any phase-out start near your income. These starts are fixed, not indexed.
- Mark the entity dates: Form 2553 for an S corporation election in 2027 is due March 15, 2027, and the Illinois entity tax election is yearly.
- Look again in mid-November 2026 for the retirement limits and Medicare numbers.
Common questions
Are the 2027 tax brackets out?
Yes. The IRS released them on November 5, 2026 in Revenue Procedure 2026-35.
When will the 2027 401(k) and IRA limits come out?
No date has been promised. Last year the IRS announced the 2026 limits on November 13, 2025. Watch the IRS newsroom.
Do the tips and overtime deductions still apply in 2027?
Yes, under current law they run through tax year 2028 with the same fixed amounts. Payroll taxes still apply, and Illinois starts from federal adjusted gross income, which these deductions do not lower.
Official sources
- IRS: Revenue Procedure 2026-35, 2027 inflation adjustments
- IRS: news release IR-2026-133, 2027 tax inflation adjustments
- Public Law 119-21 (govinfo.gov)
- IRS: Saver's Match
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