The IRS announced the 2027 tax brackets on November 5, 2026. For tax year 2027, the standard deduction rises to $33,200 for married couples filing jointly, $16,600 for single filers, and $24,925 for heads of household. The top 37% rate begins above $661,375 for single filers and $793,650 for joint filers, and the Section 179 expensing limit increases to $2,640,000. These figures apply to tax year 2027, with returns filed in 2028, so they won’t change the return you file this spring for 2026.
That last point is where most of the confusion is. Headlines about “new tax brackets” make it sound like next year’s tax bill just changed, but the 2027 numbers affect your 2027 planning, not your 2026 filing. This guide explains what’s new, what it means if you own a business in Florida, and what to do now.
What Did the IRS Announce for 2027?
On November 5, 2026, the IRS released Revenue Procedure 2026-35, which adjusts almost 70 tax provisions for inflation. The overall adjustment was about 3.2%, according to NerdWallet’s coverage. The items most business owners care about are below.
| Item | 2027 Amount |
|---|---|
| Standard deduction, married filing jointly | $33,200 (up $1,000 from 2026) |
| Standard deduction, single or married filing separately | $16,600 |
| Standard deduction, head of household | $24,925 |
| Section 179 expensing limit | $2,640,000 (up from $2,560,000 in 2026) |
| Section 179 limit for SUVs | $33,100 (up from $32,000) |
| Child tax credit | $2,300, with up to $1,800 refundable |
| Annual gift tax exclusion | $20,000 (up from $19,000) |
| Employer-provided child care credit | Up to $515,943.67 ($619,132.40 for eligible small businesses) |
The Section 179 figure also confirms the 2026 limit we’ve been citing: $2,560,000 for this year.
What Are the 2027 Federal Tax Brackets?
Here are the 2027 marginal rates by taxable income:
| Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | Up to $12,800 | Up to $25,600 |
| 12% | $12,800 to $52,025 | $25,600 to $104,050 |
| 22% | $52,025 to $109,125 | $104,050 to $218,250 |
| 24% | $109,125 to $208,325 | $218,250 to $416,650 |
| 32% | $208,325 to $264,550 | $416,650 to $529,100 |
| 35% | $264,550 to $661,375 | $529,100 to $793,650 |
| 37% | Over $661,375 | Over $793,650 |
Tax brackets are marginal. Only the income inside each bracket is taxed at that bracket’s rate, so moving into a higher bracket doesn’t make all of your income taxed at the higher rate.
Why Do the 2027 Numbers Matter if I’m Filing 2026 Taxes First?
Two reasons. First, your 2027 estimated tax payments start on April 15, 2027, and higher brackets and a higher standard deduction change how much you should send in. Second, planning decisions you make now, such as equipment purchases and retirement contributions, depend on which year’s limits apply.
Remember which year is which:
- Tax year 2026 (filed in early 2027): the Section 179 limit is $2,560,000, and the standard deduction for joint filers is $32,200
- Tax year 2027 (filed in 2028): the Section 179 limit is $2,640,000, and the standard deduction for joint filers is $33,200
How Do Tax Brackets Affect Small Business Owners?
Sole proprietors, partners, LLC owners, and S-corporation shareholders are generally taxed on business profit at individual rates, because the income passes through to their personal returns. That means these brackets directly determine how much of your profit is taxed at 10%, 22%, or 32%. Florida has no state personal income tax, so the federal brackets are the main rates you plan around. If you’re deciding on a structure, our guide to LLC vs S-corp taxes explains how each is taxed.
What Changed for Business Expensing?
The Section 179 limit rises to $2,640,000 for 2027, and the SUV limit rises to $33,100. Combined with permanent 100% bonus depreciation, businesses can generally deduct qualifying equipment in the year it’s placed in service. The IRS also updated the Qualified Business Income deduction thresholds for 2027, so check the exact figures in Revenue Procedure 2026-35 or with a tax professional before relying on them. Our OBBBA tax changes guide covers how these provisions fit together.
What Should You Do Before the End of 2026?
Use the 2026 numbers for 2026 decisions, and start sketching 2027:
- Finish 2026 planning. Equipment generally must be placed in service by December 31 to count for 2026. Our year-end tax planning guide lists the moves to make.
- Make the final 2026 estimated payment by January 15, 2027, as explained in our quarterly estimated taxes guide.
- Reconcile your books so your profit is accurate before any projections.
- Estimate 2027 income and review whether your estimated payments need to change.
- Mark your 2027 dates using our small business tax calendar for 2027.
Will Payroll Withholding Change in 2027?
The IRS will update its withholding tables for 2027, and payroll providers typically apply them automatically. If you handle payroll yourself, confirm your software has the latest tables before your first January pay run. Our payroll services guide explains what to check.
How Can a Bookkeeper Help With Tax Planning?
Planning depends on accurate numbers. A bookkeeper keeps your profit and loss statement current so you know which bracket you’re likely in, and a tax professional turns that into decisions. Our Tax Planning Services help Sanford and Central Florida owners plan ahead, our monthly bookkeeping services keep the numbers reliable, and our Business Tax Preparation team handles filing. You can also browse our full range of services.
For the official announcement, see the IRS 2027 inflation adjustments release.
Frequently Asked Questions
What are the 2027 tax brackets? The 2027 rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. For single filers, the 10% bracket goes up to $12,800, and the 37% rate starts above $661,375.
What is the 2027 standard deduction? $33,200 for married couples filing jointly, $16,600 for single filers and married individuals filing separately, and $24,925 for heads of household.
When do the 2027 tax brackets apply? To tax year 2027, with returns filed in 2028. They don’t apply to the return you file in 2027 for tax year 2026.
What is the Section 179 limit for 2027? $2,640,000, up from $2,560,000 in 2026, with a $33,100 limit for certain SUVs.
Did the IRS change the child tax credit for 2027? Yes. It rises to $2,300, with up to $1,800 refundable.
What is the 2027 annual gift tax exclusion? $20,000 per recipient, up from $19,000.
How much did the IRS adjust for inflation? About 3.2%, according to published coverage of the announcement.
Does Florida have its own income tax brackets? No. Florida has no state personal income tax, so only federal brackets apply to personal income.
How do tax brackets work? They’re marginal. Each rate applies only to the portion of income within that bracket.
Do business owners use the same brackets? Owners of pass-through businesses are generally taxed at individual rates on business profit, so yes.
Should I change my 2027 estimated tax payments? Review them using your expected 2027 income and the new brackets. A tax professional can help you set them.
Where can I find the official 2027 numbers? In IRS Revenue Procedure 2026-35 and the IRS newsroom release dated November 5, 2026.
Plan for 2027 Before the Year Ends
Good planning starts with accurate books. Book a free consultation with our Sanford, FL team, or visit our homepage to learn more.
This guide is general information, not tax or legal advice. Confirm your situation with a tax professional.
