IRS announces tax adjustments for 2027 – Here's what taxpayers need to know

What will your tax return look like in 2028?

Taxpayers are hoping for more money in their wallets, but that may not be the case.

The IRS announced Thursday adjustments to tax year 2027, including increases to the standard deduction.

“This is a standard part of the tax code," said Alex Durante, a senior economist at the Tax Foundation. "These adjustments have actually been in place since the early 80s. And what they do is that they adjust all of the tax brackets for inflation.”

For tax year 2027, deductions for single taxpayers increase by $500. And for married filing jointly taxpayers, it’s a $1,000 increase.

Durante said the increase is to keep up with inflation.

“And the reason they do this is to protect taxpayers from higher liabilities as they earn more," he said.

And there's another increase families should know about. The child tax credit is going up by $100, meaning eligible families could see a lower federal tax bill for each qualifying child.

But Durante warns not to confuse these annual adjustments with an overall tax cut.

“The adjustments really do not tell you whether you'll be getting a tax cut or even a tax increase over next year," he said.

He also points to the One Big Beautiful Bill Act, which did not see any adjustments but includes tax breaks on things like tips and overtime.

But some of those provisions are set to expire at the end of 2028.

Durante said if taxpayers want to see additional relief, that will ultimately come down to lawmakers.

“If voters are clamoring or want additional, say, tax cuts or tax relief beyond the one that One Big Beautiful Bill Act, that's something that has to be enacted through legislation; these adjustments each year that the IRS does, they're not going to address that," he said.