Federal Tax Brackets for 2026 and 2027: Rates, Standard Deduction and Capital Gains Tables

What are the 2026 and 2027 federal tax brackets?

The tables show taxable income, which is income after the standard deduction or itemized deductions and after the senior deduction described in the next section. Each rate applies only to the income inside its own range.

From 2026 to 2027 the thresholds rise by roughly 3.1%. The adjustment is not a decision the IRS makes each autumn. The tax code requires the thresholds to be raised by the change in the Chained Consumer Price Index for All Urban Consumers, measured over the twelve months ending August 31, with each result rounded down to a multiple of $50.

Sources: 2026, IRS inflation adjustments for tax year 2026 (Revenue Procedure 2025-32); 2027, IRS inflation adjustments for tax year 2027 (Revenue Procedure 2026-35, section 3.01). Indexing rule: 26 U.S.C. 1(f).

What is the standard deduction, and how much more is it at 65?

The standard deduction is the amount of income that is not taxed at all for people who do not itemize. Three layers apply to a household aged 65 or older: the basic amount for the filing status, an additional amount for each person who is 65 or older or blind, and, through 2028, a separate senior deduction.

The additional amount is per condition and per person. A married couple who are both 65 or older add it twice. A person who is both 65 or older and blind also adds it twice. You count as 65 for a tax year if you have reached that age before the year ends.

Standard deduction for people 65 and older

The standard deduction columns include the additional amount for age. The senior deduction columns assume income below the phase-out threshold.

The $6,000 senior deduction

The law enacted in July 2025 added a deduction of up to $6,000 for each person who is 65 or older by the end of the tax year. It is separate from the standard deduction and stacks on top of it, and people who itemize can claim it as well. The rules, all set in the statute:

• Amount: $6,000 per qualifying person, so up to $12,000 for a couple who are both 65 or older.
• Years: tax years 2025 through 2028. It is not available for 2029 unless Congress extends it.
• Phase-out: each person's deduction is reduced by 6% of modified adjusted gross income above $75,000, or above $150,000 on a joint return. It reaches zero at $175,000 and $250,000.
• Filing status: a married couple must file jointly. It is not available on a separate return.
• Identification: the Social Security number of each qualifying person must be on the return.
• Not indexed: the $6,000 and both thresholds are fixed dollar amounts, the same in 2026 and 2027.

On a joint return the reduction is applied to each spouse's $6,000, so a couple who are both 65 or older lose $12 of deduction for every $100 of income over $150,000. Inside the phase-out range that raises the effective rate on additional income, as the worked example below shows. The deduction lowers taxable income, not adjusted gross income, so it does not help with Medicare IRMAA or the taxation of Social Security benefits, which are both measured before it.

Sources: Revenue Procedure 2026-35, section 3.15; Revenue Procedure 2025-32; senior deduction, 26 U.S.C. 151(d)(5)(C) and IRS, deductions for working Americans and seniors.

What are the capital gains tax brackets?

Long-term capital gains, on assets held more than a year, and qualified dividends have their own three rates: 0%, 15% and 20%. The breakpoints are stated in terms of total taxable income, not the size of the gain.

Taxable income, including the gain. The 20% rate applies above the 15% figure. Short-term gains, on assets held a year or less, are taxed at the ordinary rates in the first section.

The 3.8% net investment income tax

A separate 3.8% tax applies to investment income, including capital gains, dividends, interest and rents, when modified adjusted gross income is above the thresholds below. It is charged on the smaller of net investment income or the amount by which income exceeds the threshold. With it, the top federal rate on a long-term gain is 23.8%.

These thresholds are written into the law as fixed amounts and are not adjusted for inflation, so more households cross them each year. Our guide to the net investment income tax covers what counts as investment income, and the capital gains tax calculator applies both taxes to a sale.

Sources: Revenue Procedure 2026-35, section 3.03; Revenue Procedure 2025-32; IRS Topic 559.

What is the difference between a marginal and an effective tax rate?

The marginal rate is the rate on the next dollar of income. The effective rate is total tax divided by income. They differ for two reasons: deductions remove a first layer of income from tax entirely, and the income that remains is taxed in slices, each at its own rate.

Worked example: a retired couple, both 67

Take a hypothetical married couple, both 67, filing jointly with $130,000 of adjusted gross income from pensions, IRA withdrawals, interest and the taxable part of their Social Security. They take the standard deduction. The table computes their tax under the 2026 rules and, for the same income, under the 2027 rules.

In 2026 the three deductions stack to $47,500, so more than a third of this couple's income is not taxed. The remaining $82,500 is taxed in slices:

• 10% on $24,800 of taxable income: $2,480
• 12% on $57,700 of taxable income: $6,924

The total is $9,404. Their marginal rate is 12%, and their effective rate is 7.2%. With the same dollar income in 2027, the larger deductions and wider brackets reduce the tax by $148. That is what indexing does: it keeps a household whose income only matches inflation from drifting into higher tax.

When the marginal rate is higher than the bracket

Now give the same couple $200,000 of income. They are $50,000 over the senior deduction threshold, so the deduction has shrunk from $12,000 to $6,000. Their taxable income is $158,500, which is in the 22% bracket, and the 2026 tax is $24,294. Another $1,000 of income adds $246 of tax, an effective marginal rate of 24.6%, because each extra dollar is taxed and also removes 12 cents of deduction. The effect ends at $250,000, where the senior deduction is gone.

Computed from the tables on this page. Ordinary income only; no credits, no state tax.

How do Social Security and capital gains stack on ordinary income?

The bracket tables assume every dollar is ordinary income. Two kinds of retirement income follow their own rules and are layered on top of it.

Capital gains sit on top

Ordinary income fills the brackets first. Long-term gains and qualified dividends are then placed on top, and the rate on them depends on where that top layer falls against the capital gains breakpoints. The example couple has $82,500 of ordinary taxable income in 2026, which is $16,400 below the 0% ceiling of $98,900.

Suppose they also realize a $40,000 long-term gain. Adjusted gross income becomes $170,000, which is over the senior deduction threshold, so that deduction falls by $2,400 and ordinary taxable income rises to $84,900. Of the gain, $14,000 is taxed at 0% and $26,000 at 15%. Total tax rises from $9,404 to $13,592. The gain has cost $4,188, or 10.5% of $40,000: less than the 15% headline rate because part fell in the 0% range, and more than the gains tax alone because the gain also reduced a deduction.

Social Security is pulled in by other income

Once combined income passes $32,000 for a couple ($25,000 for a single filer), each additional dollar of other income makes 50 cents of Social Security benefits taxable as well, and 85 cents at higher incomes, until 85% of benefits are taxed. In the 85% range, one more dollar of IRA withdrawal adds $1 plus 85 cents to taxable income. In the 12% bracket that is an effective rate of 22.2%; in the 22% bracket it is 40.7%. This is often called the tax torpedo. It ends once 85% of benefits are taxable, after which the rate drops back to the bracket rate.

The thresholds for taxing benefits are not indexed, so each year's Social Security COLA moves more households into this range. The taxable Social Security calculator shows where the range starts and ends for your figures, and taxes in retirement explains how the pieces fit together.

Source for the benefit thresholds: IRS Publication 915.

What does filling a bracket mean for a Roth conversion?

A Roth conversion moves money from a traditional IRA to a Roth IRA and adds the converted amount to ordinary income for the year. Filling a bracket means converting just enough to bring taxable income to the top of a chosen bracket, so that every converted dollar is taxed at that rate or lower and none at the next one.

The bracket tables give the room. The example couple's 2026 taxable income of $82,500 is $18,300 below the top of the 12% bracket at $100,800. A conversion of $18,300 would be taxed at 12%, adding $2,196 of federal tax. The next dollar would be taxed at 22%.

The bracket edge is only one of the lines a conversion can cross. Others sit at different incomes and are measured differently:

• The senior deduction phase-out, at $75,000 or $150,000 of modified AGI. This couple has $20,000 of room before it starts.
• The Medicare IRMAA thresholds, which begin above $218,000 of modified AGI for a couple in 2026 and act as cliffs two years later. See the IRMAA brackets.
• The taxation of Social Security, if the household is still in the phase-in range described above. The example treats the taxable part of benefits as fixed, which holds only when 85% is already taxable.
• The capital gains 0% ceiling, since conversion income fills the space under it.
• The net investment income tax threshold, at $250,000 for a couple.

Whether paying 12% or 22% now is worthwhile depends on the rate the same money would face later, which in turn depends on future required distributions and on whether one spouse will be filing alone. This page supplies the thresholds, not a recommendation. The Roth conversion calculator models a conversion with these interactions, and the RMD table shows the withdrawals that will be required from the money left unconverted.

What happens to the brackets when a spouse dies?

A surviving spouse can file a joint return for the year of death. In later years most survivors file as single, unless another status applies. The single brackets are half the width of the joint ones up to the 32% rate, and the standard deduction is half as large. Income does not usually halve: the smaller Social Security benefit stops, but IRAs and investment accounts typically pass to the survivor along with the required distributions from them.

Continuing the example, suppose one spouse dies and the survivor, now filing as single at 67 or older, has $105,000 of adjusted gross income, $25,000 less than the couple had.

Income fell by $25,000 and the tax rose by $3,491. The survivor is in the 22% bracket where the couple was in the 12% bracket, and the single threshold of $75,000 has cut into the senior deduction. The same shift applies to the IRMAA thresholds and to the thresholds for taxing Social Security. This is one reason couples look at their brackets as a household over both lifetimes, and it is covered further in Social Security survivor benefits.

What are the estate and gift tax figures?

The exclusion was set at $15,000,000 per person for 2026 by the July 2025 law and is indexed from 2027. Gifts within the annual exclusion are not counted as taxable gifts and do not use any of it. The estate tax calculator applies these figures to an estate.

Sources: Revenue Procedure 2026-35, sections 3.44 and 3.46; Revenue Procedure 2025-32.

Which rules are permanent, and which expire?

The rates and deduction levels introduced in 2018 were written to end after 2025. The law enacted on July 4, 2025 removed that end date. “Permanent” here means the provision has no expiry date in the statute; Congress can still change it.

Two patterns matter for planning. The indexed items keep pace with prices, so a household whose income rises with inflation stays in roughly the same position. The items that are not indexed catch more income every year, which is why the taxation of Social Security and the net investment income tax reach more households each year. And the senior deduction has a known end: under current law the 2029 return will not have it.

State income tax is a separate layer with its own brackets and its own treatment of pensions, IRA withdrawals and Social Security. Our state-by-state guide to retirement taxes covers each state.

Sources: 26 U.S.C. 1(j) (rates); 26 U.S.C. 63(c)(7) (standard deduction); 26 U.S.C. 151(d)(5) (senior deduction); IRS, deductions for working Americans and seniors; 26 U.S.C. 164(b) (state and local tax cap).

Frequently asked questions

Sources

• IRS inflation adjustments for tax year 2027 (news release IR-2026-133, November 5, 2026) and Revenue Procedure 2026-35: all 2027 brackets, standard deduction amounts, capital gains breakpoints and estate and gift figures.
• IRS inflation adjustments for tax year 2026 (Revenue Procedure 2025-32): all 2026 figures.
• 26 U.S.C. 1: the rate schedules, the removal of the 2025 expiry in subsection (j), the capital gains rates in subsection (h) and the chained CPI indexing rule in subsection (f).
• 26 U.S.C. 63: the standard deduction and the additional amounts for age and blindness.
• 26 U.S.C. 151(d)(5)(C) and IRS, One Big Beautiful Bill Act deductions for working Americans and seniors: the senior deduction amount, years, phase-out and filing requirements, and the other deductions that end after 2028.
• IRS Topic 559: the net investment income tax rate and thresholds.
• IRS Publication 915: the thresholds for taxing Social Security benefits.
• 26 U.S.C. 164(b): the state and local tax deduction cap and its end date.