# IRS Announces 2027 Inflation Adjustments for Tax Deductions and Credits Standard deductions and child tax credits increase to offset rising annual price levels. - **Source:** [ABC News – Money](https://abcnews.go.com/Business) - **Published:** 2026-11-10 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/677d858d-0256-40fd-89dc-5fa900fd9cce ## Annual Inflation Adjustments Released The IRS officially released its annual inflation adjustments for the 2027 tax year on November 5. These updates, which reflect a 3.2% increase in price levels, will apply to tax returns filed in 2028. The adjustments aim to prevent bracket creep and maintain the real value of various tax benefits for households. ## Standard Deduction Increases Announced For single filers, the standard deduction will rise to $16,600 from the previous $16,100. Married couples filing jointly will see their deduction increase to $33,200 from $32,200, while heads of household will reach $24,925. These changes provide a larger portion of income that remains untaxed for the majority of American taxpayers. ## Impact on Tax Liabilities A married couple earning $100,000 using the standard deduction will see their federal income tax bill fall to $7,504 from $7,640. Similarly, a single filer earning $60,000 will see their bill drop to $4,952 from $5,020. These calculations assume household income remains constant throughout the year, illustrating the direct effect of inflation adjustments. ## Child Tax Credit Adjustments The child tax credit will rise by $100, reaching a maximum of $2,300 per child. Additionally, the refundable portion of this credit will increase by $100 to $1,800. These adjustments follow the 2025 law, which established the credit at $2,200 and explicitly tied future annual increases to the official inflation rate. ## Earned Income Credit Changes The maximum earned income tax credit for workers without children will rise to $685 from $664. For families with two children, the maximum credit is set to increase to $7,552 from $7,316. These adjustments ensure that low-to-moderate income workers receive support that keeps pace with the rising cost of living across the country. ## Fixed Breaks and Sunset Clauses Several tax breaks from the 2025 law, including deductions for tip income and overtime pay, remain fixed and do not adjust for inflation. These specific provisions are scheduled to expire after the 2028 tax year unless Congress acts to extend them. Consequently, their real value will diminish slightly with each passing year. ## Estate Tax and Top Rates The estate tax exclusion, made permanent at $15 million by the 2025 law, will rise with inflation to $15.48 million. Meanwhile, the top income tax rate remains at 37%. This rate will apply to income exceeding $661,375 for single filers and $793,650 for married couples filing jointly during the 2027 tax year. ## Strategic Financial Planning Implications While these adjustments provide relief, taxpayers whose wages rise in line with inflation will see their overall tax bills remain largely unchanged. The reliance on fixed-value deductions for overtime and tips highlights the importance of monitoring future legislative updates. Taxpayers should plan accordingly as these specific non-indexed benefits approach their upcoming expiration date. ## Sources covering this story - https://abcnews.com/Business/wireStory/irs-raises-2027-standard-deduction-child-tax-credit-138022006 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._