The 2027 tax cuts are the individual tax changes that will apply when you file your return in early 2027 for tax year 2026, and they come from the One Big Beautiful Bill Act signed into law on July 4, 2025. Rather than letting the 2017 Tax Cuts and Jobs Act expire as scheduled, Congress made most of its individual provisions permanent and layered new benefits on top. The rate jump many taxpayers were bracing for did not happen. Instead you keep the lower brackets, a larger standard deduction, a bigger child tax credit, and a much higher estate tax exemption.
Income Tax Rates for Tax Year 2026
The seven-bracket structure is now permanent. Rates were set to snap back to 15%, 25%, 28%, 33%, 35%, and 39.6%. They didn’t. For 2026 the rates stay at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with inflation-adjusted thresholds.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Single filer brackets for 2026:
- 10% on income up to $12,400
- 12% from $12,401 to $50,400
- 22% from $50,401 to $105,700
- 24% from $105,701 to $201,775
- 32% from $201,776 to $256,225
- 35% from $256,226 to $640,600
- 37% on income above $640,600
Married couples filing jointly see roughly double each threshold, with the 37% rate starting above $768,700.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 For most middle-income earners, the practical effect is staying at 12% or 22% rather than jumping to 15% or 25%.
Standard Deduction for 2026
The nearly doubled standard deduction is now permanent, and there’s a temporary bonus stacked on top for the next few years. For tax year 2026:
- Single filers: $16,100
- Married filing jointly: $32,200
- Head of household: $24,150
Those figures include an extra $1,000 for singles, $1,500 for heads of household, and $2,000 for joint filers that applies only for tax years 2025 through 2028.2Congress.gov. Tax Provisions in H.R. 1, the One Big Beautiful Bill Act After 2028, the deduction stays at the permanent inflation-adjusted level but loses the bonus.
The personal exemption is not coming back. The law made its elimination permanent, so there’s no per-person deduction for you or your dependents beyond the standard deduction.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
SALT Deduction Cap Raised to About $40,000
The $10,000 cap on the state and local tax deduction is going up, though not disappearing. For tax year 2026, taxpayers with modified adjusted gross income under about $500,000 ($250,000 for married filing separately) can deduct up to roughly $40,000 in state and local taxes, with the exact figure adjusted for inflation.2Congress.gov. Tax Provisions in H.R. 1, the One Big Beautiful Bill Act
Two catches. Above the income threshold, the cap phases down gradually back to the original $10,000 floor. And the higher cap runs only through tax year 2029. After that it reverts to $10,000 unless Congress extends it. If you live in a high-tax state, the fourfold increase is meaningful for the next several filing seasons but has a defined end date.
Child Tax Credit Goes Up to $2,500
The credit was scheduled to drop back to $1,000 per qualifying child. It went the other direction. The new law raised it from $2,000 to $2,500 per child and made that amount permanent.3Ways and Means Committee. The Working Families Tax Cuts
The higher phase-out thresholds also stay in place. Joint filers begin losing the credit at $400,000 of modified adjusted gross income rather than $110,000, and the credit still reduces by $50 for every $1,000 of income above the threshold.4Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit
Small Business QBI Deduction Made Permanent
If you own a sole proprietorship, partnership, or S corporation, the Section 199A deduction that lets you write off up to 20% of qualified business income was set to expire at the end of 2025. It’s now permanent.5Congress.gov. Public Law 119-21
The mechanics are unchanged. Specified service businesses (law, medicine, consulting, and similar fields) still phase out of the deduction once taxable income crosses set thresholds, and W-2 wage and capital limitations still apply to higher-income non-service businesses. The only change is that the expiration date is gone.
Estate and Gift Tax Exemption at $15 Million
The exemption was set to fall back to roughly $5 million (inflation-adjusted). Instead it jumped to $15 million per person for 2026, with annual inflation adjustments beginning in 2027.6Internal Revenue Service. What’s New – Estate and Gift Tax A married couple using portability can shelter up to $30 million. Assets above the exemption are still taxed at rates up to 40%. For most families this doesn’t change anything, but for those with family businesses, farms, or significant real estate, the tripling from the pre-TCJA level matters for succession planning.
New Deductions and Credits
A few provisions didn’t exist under the TCJA at all.
Charitable giving for non-itemizers. If you take the standard deduction, you can now deduct up to $1,000 ($2,000 for joint filers) in charitable contributions directly from your income.5Congress.gov. Public Law 119-21 This is a permanent version of a temporary pandemic-era rule and creates a real benefit for taxpayers who give but don’t itemize.
Scholarship granting organization credit. Taxpayers can claim up to $1,700 per year for contributions to qualifying scholarship organizations, with unused amounts carrying forward up to five years.5Congress.gov. Public Law 119-21
Employer student loan help. The $5,250-per-year exclusion for employer-paid student loan assistance was extended and will adjust for inflation starting in 2027.5Congress.gov. Public Law 119-21
Employer-provided childcare credit. The maximum credit for employers offering on-site childcare rose from $150,000 to $500,000, or $600,000 for eligible small businesses.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
What’s Temporary and Worth Planning Around
Most of the changes are permanent, but two are not. The extra standard deduction bonus runs only through tax year 2028; after that, the base deduction stays but the top-up disappears. The expanded SALT cap runs only through tax year 2029; without further action from Congress it falls back to $10,000. If either of those provisions is doing meaningful work on your return, note the sunset dates now and adjust your planning as those years approach.