The IRS just dropped the official tax brackets for , and there’s good news for most Houstonians: the income thresholds are going up. That means many people could keep more of their money — or at least avoid getting pushed into a higher tax bracket just because of inflation.
Here’s what you need to know, in plain English.
The U.S. uses a progressive tax system — meaning you don’t pay one flat rate on all your income. Instead, different chunks of your income are taxed at different rates. Think of it like climbing a staircase: only the income on each “step” gets taxed at that step’s rate.
So if you’re a single filer earning $60,000, you’re not paying 22% on all of it. You pay 10% on the first $12,800, 12% on the next chunk, and 22% only on the portion above $52,025. Big difference.
The seven tax rates stay the same — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — but the income thresholds have been adjusted upward for inflation.
| Tax Rate | Taxable Income Range | Tax Owed |
|---|---|---|
| 10% | Up to $12,800 | 10% of taxable income |
| 12% | $12,801 – $52,025 | $1,280 + 12% over $12,800 |
| 22% | $52,026 – $109,125 | $5,987 + 22% over $52,025 |
| 24% | $109,126 – $208,325 | $18,549 + 24% over $109,125 |
| 32% | $208,326 – $264,550 | $42,357 + 32% over $208,325 |
| 35% | $264,551 – $661,375 | $60,349 + 35% over $264,550 |
| 37% | Over $661,375 | $199,237.75 + 37% over $661,375 |
Source: IRS Revenue Procedure 2026-35 | IR-2026-133, Nov. 5, 2026
| Tax Rate | Taxable Income Range | Tax Owed |
|---|---|---|
| 10% | Up to $25,600 | 10% of taxable income |
| 12% | $25,601 – $104,050 | $2,560 + 12% over $25,600 |
| 22% | $104,051 – $218,250 | $11,974 + 22% over $104,050 |
| 24% | $218,251 – $416,650 | $37,098 + 24% over $218,250 |
| 32% | $416,651 – $529,100 | $84,714 + 32% over $416,650 |
| 35% | $529,101 – $793,650 | $120,698 + 35% over $529,100 |
| 37% | Over $793,650 | $213,290.50 + 37% over $793,650 |
Source: IRS Revenue Procedure 2026-35 | IR-2026-133, Nov. 5, 2026
| Tax Rate | Taxable Income Range | Tax Owed |
|---|---|---|
| 10% | Up to $12,800 | 10% of taxable income |
| 12% | $12,801 – $52,025 | $1,280 + 12% over $12,800 |
| 22% | $52,026 – $109,125 | $5,987 + 22% over $52,025 |
| 24% | $109,126 – $208,325 | $18,549 + 24% over $109,125 |
| 32% | $208,326 – $264,550 | $42,357 + 32% over $208,325 |
| 35% | $264,551 – $396,825 | $60,349 + 35% over $264,550 |
| 37% | Over $396,825 | $106,031.25 + 37% over $396,825 |
Source: IRS Revenue Procedure 2026-35 | IR-2026-133, Nov. 5, 2026
| Tax Rate | Taxable Income Range | Tax Owed |
|---|---|---|
| 10% | Up to $18,250 | 10% of taxable income |
| 12% | $18,251 – $69,650 | $1,825 + 12% over $18,250 |
| 22% | $69,651 – $109,100 | $8,093 + 22% over $69,650 |
| 24% | $109,101 – $208,300 | $16,782 + 24% over $109,100 |
| 32% | $208,301 – $264,550 | $40,590 + 32% over $208,300 |
| 35% | $264,551 – $661,350 | $58,590 + 35% over $264,550 |
| 37% | Over $661,350 | $197,995 + 37% over $661,350 |
Source: IRS Revenue Procedure 2026-35 | IR-2026-133, Nov. 5, 2026
| Filing Status | 2026 Deduction | 2027 Deduction | Change |
|---|---|---|---|
| Single / Married Filing Separately | $16,100 | $16,600 | +$500 |
| Married Filing Jointly | $32,200 | $33,200 | +$1,000 |
| Head of Household | $24,150 | $24,925 | +$775 |
Source: IRS Revenue Procedure 2026-35 | IR-2026-133, Nov. 5, 2026
Before you even get to the brackets, the standard deduction lowers your taxable income. For 2027, it’s increasing:
That extra $500–$1,000 in deductions could save most households $60–$220 in taxes, depending on their bracket. Not life-changing, but real money.
Every year, the IRS adjusts tax brackets to account for inflation — a process designed to prevent what’s called “bracket creep.”
Bracket creep happens when your paycheck goes up just to keep pace with rising prices, but that raise accidentally bumps you into a higher tax bracket — even though you’re not actually richer. The 2027 adjustments are meant to prevent that.
“Hardworking American taxpayers will continue to benefit from the Working Families Tax Cuts and will see credits and deductions increase with this adjustment.” — Frank J. Bisignano, IRS Chief Executive Officer (IRS IR-2026-133, Nov. 5, 2026)
Beyond the brackets, the IRS also announced several other notable updates:
Here’s the bottom line by situation:
If your income stayed roughly the same in 2027: You’ll likely pay slightly less in taxes, because the brackets shifted up but your income didn’t. More of your income falls in lower brackets.
If you got a raise: If your raise roughly matches inflation (~3%), you’ll probably stay in the same bracket. If your raise was significantly larger, some of that extra income may push into a higher bracket — but only that portion, not all of it.
If you have kids: The $100 bump in the Child Tax Credit is modest but real. Combined with the higher standard deduction, families could see a meaningful reduction in their tax bill.
If you’re planning a Roth conversion or selling investments: The higher bracket thresholds give you a bit more room to convert IRA funds or realize capital gains before crossing into the next rate tier. Worth a conversation with your financial advisor.
These brackets apply to income you earn in 2027 — meaning the tax return you’ll file in early 2028. For your upcoming April 2027 filing, you’ll still use the 2026 brackets.
The 2027 tax brackets aren’t a dramatic overhaul — the rates are the same. But the inflation adjustments mean most Americans will have a slightly lower tax burden, or at least won’t get penalized just for keeping up with the cost of living. Combined with a higher standard deduction and a boosted Child Tax Credit, it’s a modest but real win for most households.
As always, everyone’s tax situation is different. Consider consulting a CPA or tax professional to see how these changes apply to your specific income, deductions, and goals.
