IRS 2027 tax brackets: How much can you earn before hitting the 37% tax rate?

The IRS 2027 tax brackets could start at higher income levels, according to preliminary estimates released by Bloomberg Tax. For married couples filing jointly, the 37% tax bracket may begin at over $793,650, while single taxpayers might face a threshold exceeding $661,375. These figures are based on a 3.2% inflation adjustment and are not officially confirmed by the IRS.

The IRS typically announces the official tax brackets in the fall, after completing the full statutory calculation period. The projected 2027 threshold would be higher than the official 2026 level, which set the 37% bracket at $768,700 for joint filers and $640,600 for single filers. If the estimates hold true, the 37% threshold would increase by $25,950 and $20,775 for joint and single filers, respectively.

The 24% tax bracket might also provide additional room, with taxable income up to $416,650 for joint filers and $208,325 for singles remaining in this bracket. These projections could impact financial planning for large transactions, Roth conversions, nonqualified stock option exercises, and bonus income decisions. However, taxpayers must remember that income is taxed in separate brackets, and deductions can reduce taxable income before federal income tax is applied.

The standard deduction is expected to rise in 2027, further reducing taxable income for those who claim it. Long-term capital-gains tax brackets are also being estimated, with a separate analysis from tax analyst Kelly Phillips Erb providing possible 2027 thresholds. These estimates are subject to change based on inflation data, IRS rounding rules, and potential legal interpretations.

Taxpayers should treat these projections as planning estimates rather than guarantees of the final 2027 tax rules.