IRS changes could mean more money in your pocket: What’s new?

NewsThe 2027 tax brackets apply to income earned Jan. 1 through Dec. 31, 2027 for taxes filed in 2028. (Associated Press)A new change from the Internal Revenue Service means some taxpayers may be able to keep a little more of their money.The IRS announced the 2027 tax brackets on Thursday. Those adjustments include higher federal tax brackets that can help people keep more of their money because a larger portion of the income may be taxed at a lower rate.Federal income taxes are progressive. This means you don’t pay one tax rate on all your income and, instead, different portions are taxed at different rates, or brackets. Each bracket is taxed at a progressively higher rate, meaning high-income earners pay a larger percentage of their income in taxes than a lower income earner. For example, an individual taxpayer would pay 10% for income up to $12,800, then 12% for amounts over $12,800 up to $52,024 and up the scale.Higher income thresholds also mean you can earn more money before moving into a higher tax bracket and paying more. Tax brackets are also adjusted for inflation so that pay raises don’t automatically push you into a higher tax rate when prices increase, something known as “bracket creep.”The 2027 tax brackets apply to income earned Jan. 1 through Dec. 31, 2027 for taxes filed in 2028. The threshold apply to taxable income, not total gross income. Taxable income is what remains after all other deductions are taken.2027 individual tax brackets:10% for income of $12,800 or less12% for income over $12,801 to $52,02522% for income over $52,026 to $109,12524% for income over $109,126 to $208,32532% for income over $208,326 to $264,55035% for income over $264,551 to $661,37537% for income over $661,3762027 tax brackets for married couples filing jointly10% for income $0 to $25,60012% for income $25,601 to $104,05022% for income $104,051 to $218,25024% for income $218,251 to $416,65032% for income $416,651 to $529,10035% for income $529,101 to $793,65037% for income $793,651 or moreStandard deduction changeAn increase in the standard deduction will help taxpayers as well. The standard deduction is the fixed dollar amount that reduces taxable income, lowering the amount of taxes you owe without requiring you to itemize each expense.For tax year 2027, the standard deduction increases to $33,200 for married couples filing jointly, up $1,000 from 2026. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,600 for tax year 2027, and for heads of households, the standard deduction will be $24,925.Leada Gore is a Senior Managing Producer for the Advance Local trending team, covering finance, government and consumer issues. She worked as a Managing Producer for AL.com, starting at the site in 2013 as the...