2027 tax brackets: how much more you can earn before your rate goes up

A raise in 2027 is less likely than a raise this year to push Americans into a higher federal tax bracket. The income thresholds for all seven brackets are on track to climb 3.2% for inflation. That is a bigger bump than the 2.7% adjustment applied to the 2026 brackets. These are the 2027 tax brackets projected by Bloomberg Tax, as detailed in CBS News’ report on the 2027 bracket estimates.

The IRS has not yet released its official figures. The agency usually announces each year’s inflation adjustments in October or November. Bloomberg Tax’s forecasts use the same measure the IRS uses, the chained Consumer Price Index. There is one complication this year. The Labor Department never published October 2025 inflation data because of the government shutdown at the time, so Bloomberg Tax worked from an 11-month average instead.

The larger adjustment reflects a year of faster price growth. CBS News attributed much of this year’s price pressure to the Iran war, which drove diesel past $6 a gallon, a record, and kept gasoline above $4. The August Consumer Price Index showed annual inflation of 3.4%, higher than economists had forecast.

Annual indexing exists to prevent bracket creep. Without it, a worker who gets a cost-of-living raise could land in a higher bracket and pay a larger share of income in tax, even though the raise bought nothing extra. Indexing keeps the tax code from quietly raising rates on people whose real income has not changed.

The rates themselves are not moving. The 2017 Tax Cuts and Jobs Act created the current 10%, 12%, 22%, 24%, 32%, 35% and 37% tiers, and the One Big Beautiful Bill Act made them permanent in 2025. Only the dollar ranges attached to each rate shift.

The U.S. uses a marginal system, so each rate applies only to the slice of taxable income that falls inside its band. Taxable income means income after deductions. Bloomberg Tax also projects the standard deduction will rise to $33,200 for married couples filing jointly and $16,600 for single filers in 2027.

The slides that follow walk through each bracket, from the lowest rate to the highest, with the projected 2027 income ranges for single filers and married couples filing jointly.

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The 10% bracket, the lowest federal income tax rate, is projected to cover the first $25,600 of taxable income for married couples filing jointly in 2027. For single filers, it would cover the first $12,800, according to Bloomberg Tax estimates reported by CBS News.

That is a modest increase from 2026. The 10% band currently tops out at $24,800 for couples and $12,400 for single filers, so the ceiling would rise by $800 for joint filers and $400 for singles. The dollar change is small because the bracket itself is narrow, but it follows the same 3.2% inflation adjustment as every other tier.

Every taxpayer with taxable income passes through this bracket, no matter how much they earn. A surgeon earning $900,000 and a part-time retail worker both pay 10% on their first slice of taxable income. That is how a marginal system works: higher rates apply only to the dollars above each threshold, never to the whole paycheck.

Under the projected 2027 figures, the most anyone would pay on income inside the 10% band is $2,560 for a married couple and $1,280 for a single filer. Those amounts come straight from the width of the bracket, and they form the base layer of every household’s federal income tax bill.

The bracket applies to taxable income, not gross pay. Taxable income is what remains after the standard deduction or itemized deductions are subtracted. Bloomberg Tax projects the standard deduction at $33,200 for joint filers and $16,600 for single filers in 2027. A married couple taking the standard deduction could therefore earn roughly $58,800 in gross income before any of it reached the 12% rate, assuming no other adjustments.

Many households in this range owe little or nothing in federal income tax once credits are counted. The child tax credit and the earned income tax credit reduce the tax owed directly instead of reducing taxable income. A family whose income falls entirely within the 10% bracket can end up with a refund larger than what was withheld.

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Married couples filing jointly would pay 12% on taxable income from $25,601 to $104,050 in 2027, under Bloomberg Tax’s projections. Single filers would pay that rate on income from $12,801 to $52,025. The top of the couples’ band would rise $3,250 from 2026.

For single filers, the 12% ceiling would rise by $1,625, from $50,400 this year. The bracket’s lower edge moves up too, because it starts where the 10% band ends. CBS News used this bracket to show how indexing works, noting that only the portion of a couple’s income within the range is taxed at 12%.

A large share of American workers fall into this bracket. The 12% bracket covers most middle-income households, particularly once the standard deduction is subtracted from gross pay. A married couple with $130,000 in wages and the projected $33,200 standard deduction would have about $96,800 in taxable income. That keeps them inside the 12% band in 2027.

The projected 2027 ceiling matters most for people near the edge. A couple with $104,000 in taxable income would stay entirely within the 12% band under the projected 2027 limits. Under the 2026 limits, $3,200 of that same income would be taxed at 22%.

Under the projected figures, a married couple at the top of the 12% bracket would owe $11,974 in federal income tax before credits. That covers $2,560 from the 10% band plus $9,414 from the 12% band. For a single filer at $52,025 in taxable income, the total would be $5,987. Those totals translate to average rates well below 12%. A household’s bracket overstates how much of its income goes to federal tax.

The 12% bracket also has an investment angle. Long-term capital gains and qualified dividends are taxed at a 0% rate for taxpayers whose income falls below a separate set of thresholds that roughly line up with the top of this bracket. Those thresholds are also adjusted for inflation each year, so the 3.2% bump could let more investment income escape tax.

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The 22% bracket is projected to apply to taxable income from $104,051 to $218,250 for married couples filing jointly in 2027. For single filers, it would apply from $52,026 to $109,125, according to Bloomberg Tax.

Both edges of the band shift upward. For joint filers, the top of the 22% bracket would rise $6,850 from its 2026 level of $211,400. For single filers, it would rise $3,425 from $105,700. The step from 12% to 22% is the steepest jump between any two adjacent federal brackets. It raises the rate on each additional dollar by 10 points.

That jump is why tax planners pay close attention to the boundary between these two brackets. A household near the 12%-to-22% line can lower its taxable income by contributing to a traditional 401(k), a traditional IRA or a health savings account. Each deducted dollar that would otherwise have been taxed at 22% saves 22 cents in federal income tax.

The same boundary shapes decisions about Roth conversions. Moving money from a traditional retirement account to a Roth account counts as taxable income in the year it happens. Some retirees and early retirees convert just enough each year to fill the lower brackets without spilling into higher ones. A higher 2027 ceiling gives them more room to do that.

Under the projections, a married couple with taxable income at the very top of the 22% bracket would owe $37,098 in federal income tax before credits. A single filer at the top of the band, $109,125, would owe $18,549. Both figures add the tax due in each lower band to the tax due in this one.

The 22% bracket did not exist in this form before 2018. The Tax Cuts and Jobs Act replaced the old 25% bracket with the 22% rate and moved the thresholds. The One Big Beautiful Bill Act of 2025 made those rates permanent. The debate over the bracket now centers on how far its dollar limits move each year, not on the rate itself.

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Married couples filing jointly would pay 24% on taxable income from $218,251 to $416,650 in 2027, according to Bloomberg Tax’s inflation projections. Single filers would pay it on income from $109,126 to $208,325.

The ceiling for joint filers would rise $13,100 from its 2026 level of $403,550. For single filers, it would rise $6,550 from $201,775. Because the band is so wide, the 3.2% adjustment produces a bigger dollar change here than in the brackets below it.

The 24% bracket is the widest of the middle tiers. For couples, it spans nearly $200,000 of taxable income. Many dual-income professional households stay in this one bracket through their peak earning years. A raise or bonus for someone in this band is typically taxed at the same 24% rate as the income before it.

The move from 22% to 24% is the smallest step in the rate schedule, just two percentage points. That makes the top of the 22% bracket a less critical planning line than many people assume. Shifting income across that boundary costs only two extra cents per dollar.

Other federal taxes start to stack on top in this range. The 3.8% net investment income tax applies to investment income for households whose modified adjusted gross income exceeds $250,000 for joint filers or $200,000 for single filers. An additional 0.9% Medicare tax applies to wages above those same levels. Unlike the income tax brackets, those thresholds are fixed dollar amounts in the law and are not adjusted for inflation, so more households cross them each year.

Under the projected 2027 figures, a married couple with taxable income at the top of the 24% band, $416,650, would owe $84,714 in federal income tax before credits. A single filer at the top, $208,325, would owe $42,357. Those totals reflect an average rate of about 20%, well below the 24% marginal rate.

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The 32% bracket is projected to cover taxable income from $416,651 to $529,100 for married couples filing jointly in 2027. For single filers, it would cover income from $208,326 to $264,550, according to Bloomberg Tax estimates.

For joint filers, the top of the band would rise $16,650 from $512,450 in 2026. For single filers, it would rise $8,325 from $256,225. The step up from 24% to 32% is the second-largest jump in the schedule, an eight-point increase.

The 32% bracket is narrow compared with the brackets on either side of it. For couples, it covers about $112,000 of taxable income. For singles, it covers about $56,000. Many high earners pass through it quickly on the way to the 35% rate.

Households in this range face a different set of tax issues than those in the middle brackets. The 0% long-term capital gains rate no longer applies at these income levels. The 15% rate covers most investment gains, and the top 20% rate starts at higher incomes. The 3.8% net investment income tax also applies, since these incomes sit well above its fixed thresholds.

The bracket also matters for deductions. A deduction is worth more to someone in a higher bracket, because it removes income that would otherwise be taxed at that higher rate. A $10,000 itemized charitable gift saves a 32% taxpayer about $3,200 in federal income tax, compared with $2,200 for someone in the 22% bracket. Itemizing makes sense only when total deductions exceed the projected $33,200 standard deduction for couples or $16,600 for singles.

Under the 2027 projections, a married couple at the top of the 32% bracket would owe $120,698 in federal income tax before credits. A single filer at the top of the band would owe $60,349.

As with every other bracket, the 32% rate applies only to the slice of income inside its band. A single filer with $230,000 in taxable income would pay 32% on about $21,700 of it, the portion above $208,325, and lower rates on the rest.

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The 35% bracket is projected to apply to taxable income from $529,101 to $793,650 for married couples filing jointly in 2027. For single filers, it would apply from $264,551 to $661,375, according to Bloomberg Tax.

The joint filers’ ceiling would rise $24,950 from its 2026 level of $768,700. The single filers’ ceiling would rise $20,775 from $640,600. Those are the largest dollar increases of any bracket, because the thresholds are so high.

This bracket breaks the pattern that holds for every bracket below it. From 10% through 32%, a single filer’s income limits are exactly half of a married couple’s. In the 35% bracket, they are not. The single filers’ band covers about $397,000, while the couples’ band covers about $265,000, even though couples are combining two incomes.

That imbalance creates what is often called a marriage penalty at the top of the income scale. Two people who each earn $600,000 in taxable income would each stay in the 35% bracket as single filers. Married and filing jointly, their combined $1.2 million would push a large share of their income into the 37% bracket. Most couples with incomes in the lower brackets face no such penalty, because the joint thresholds are double the single ones.

The 35% rate sits close to the top of the federal schedule, so high-income taxpayers in this range often focus on the type of income they earn as much as the amount. Long-term capital gains and qualified dividends are taxed at no more than 20%, plus the 3.8% net investment income tax. That combined rate is well below the 35% rate on wages. Eligible pass-through business owners may also use the qualified business income deduction to deduct a portion of business income, subject to limits at these income levels.

Under the projected 2027 figures, a married couple at the top of the 35% bracket would owe about $213,291 in federal income tax before credits. A single filer at the top of the band, $661,375, would owe about $199,238.

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The 37% bracket, the highest federal income tax rate, is projected to apply to taxable income above $661,375 for single filers in 2027. For married couples filing jointly, it would apply above $793,650, according to Bloomberg Tax’s projections.

Those thresholds are up from $640,600 for single filers and $768,700 for joint filers in 2026. That is a $20,775 increase for singles and a $24,950 increase for couples. The bracket has no upper limit, so every additional dollar of taxable income beyond the threshold is taxed at 37%.

The top rate has been 37% since 2018. Before the Tax Cuts and Jobs Act, the highest bracket was 39.6%. The 2017 law originally set the lower rates to expire after 2025, which would have restored the 39.6% top rate. The One Big Beautiful Bill Act, signed in July 2025, made the 37% rate and the rest of the current schedule permanent.

A 37% marginal rate does not mean a 37% tax bill. Even the highest earners pay 10% on their first $12,800 or $25,600 of taxable income, 12% on the next slice, and so on up the ladder. Only income above the top threshold faces the full 37% rate. A single filer with $1 million in taxable income would pay 37% on roughly $339,000 of it and lower rates on the remainder.

For top earners, the federal income tax is also only one layer. The 0.9% additional Medicare tax applies to wages above $200,000 for single filers and $250,000 for joint filers. The 3.8% net investment income tax applies to investment income at those same levels. The 37% income tax rate, the standard 1.45% employee Medicare tax and the extra 0.9% together bring the top federal marginal rate on wages to about 39.4%. Most states add an income tax on top of that.

For top earners, the inflation adjustment is worth relatively little in dollar terms. Moving an extra $20,775 of a single filer’s income from the 37% rate down to 35% saves about $416 in federal tax. For a married couple, the $24,950 shift is worth about $499.