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Newly projected tax brackets for 2027 could change what you pay and where you stand financially. Bloomberg Tax & Accounting has released its projected 2027 tax rates, including estimated changes to the tax bracket thresholds that might help some individuals save money on taxes next year.
Here's what you should know about the projected changes, what they might mean for your taxes, and what to watch for.
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What the projected tax changes mean
The Projected U.S. Tax Rates Report includes projected 2027 tax brackets and a standard deduction. Those changes are based on a 3.2% inflation adjustment that's larger than the 2.7% inflation increase from 2025.
As a result of increased inflation, the report projects that tax bracket thresholds may trend upward. An upward shift in tax brackets might mean that a worker earning the same salary in 2027 that they earned in 2026 could potentially fall into a lower tax bracket than they would today, so they could potentially save money on taxes. This scenario might play out for workers who have just fallen into a higher tax bracket; if the brackets increase, they might fall into a lower tax bracket next year.
The projected tax bracket changes for 2027
According to the report, the 2027 tax thresholds may include steeper adjustments for lower tax brackets.
For example, the report projects that for taxpayers married filing jointly and surviving spouses, the upper end of the lowest tax bracket may increase by $800. In 2026, the 10% bracket included incomes from $0 to $24,800, but in 2027, it may range from $0 to $25,600. The upper end of the 12% bracket may climb from $100,800 to $104,050.
Unmarried individuals may also see an increase in their tax brackets. The 12% tax bracket features an income range of over $12,400 to $50,400 in 2026. In 2027, that income range may increase from over $12,800 to $52,025. In 2026, the 22% bracket income ranged from over $50,400 to $105,700. That bracket's income for 2027 is projected to span from over $52,025 to $109,125.
How a tax bracket change might impact what you pay
Let's say that an unmarried individual earned $50,600 in 2026 and paid a 22% tax rate. According to these projections, if they make the same income in 2027, that individual could fall into the lower 12% tax bracket, saving on taxes in 2027. (Keep in mind that these are just projections and aren't definite tax bracket changes at this time.)
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The projected changes to the standard deduction
The standard deduction may help lower your taxable income, and the IRS sets the deduction each year. Using the standard deduction is a simple option that doesn't require you to keep track of expenses. The higher the standard deduction is, the more it helps lower your taxable income.
Just as the tax brackets are projected to increase in 2027, the standard deduction is projected to increase, too. In 2026, the standard deduction for married filing jointly and surviving spouses was $32,200, but the report projects it may increase to $33,200 in 2027. The deduction for heads of household was $24,150, but in 2027, it may increase to $24,925. The higher standard deduction amounts may provide some extra tax relief for taxpayers, especially when paired with the higher tax brackets.
How inflation adjustments help prevent tax bracket creep
The IRS adjusts the tax brackets and standard deduction annually for inflation, and doing so helps prevent tax bracket creep. If the brackets weren't adjusted and inflation drove up the cost of living, taxpayers might earn slightly more to make up for inflation. However, that slight income increase could push them up into a higher tax bracket.
Adjusting the brackets for inflation ensures that taxpayers are able to earn more to make up for those higher costs without automatically moving up into a higher tax bracket and paying more in taxes.
What the Projected U.S. Tax Rates Report does
Each year, Bloomberg Tax releases a Projected U.S. Tax Rates Report. The report provides projections based on data. Since the Bureau of Labor Statistics didn't report data from October of 2025, this report uses data computed based on an 11-month average instead of the traditional 12-month average.
The tax projections help guide tax professionals by reflecting changes made in the prior year; in this case, the report encompasses adjustments made under the One Big Beautiful Bill Act (OBBBA) affecting taxes.
"Tax professionals are being asked to make consequential planning decisions amid constant policy change and growing complexity," said Evan Croen, head of Bloomberg Tax & Accounting, in a press release. "By providing trusted projections before official figures are released and carrying those updates directly into the tools where professionals work, we can help them move from information to action sooner and spend more time applying their expertise to the decisions that matter most."
Bottom line
The figures in the report are just projections and aren't final IRS figures. The IRS typically releases official figures in the fall, so at this time, treat this information as a potential guideline and information to keep in mind.
Watch for the official IRS figures and use that information to review your tax preparedness. If you've experienced an income increase or decrease, you might want to review whether it might affect your tax bracket. If you have questions about your end-of-year tax planning, consider speaking with a tax professional to review your situation and prepare yourself financially for tax season.
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