2027 Tax Brackets Are Rising 3.2%. On a $90,000 Salary, Inflation Indexing Saves You About $280

Every year the IRS nudges the tax brackets up to match inflation. Most people never notice it happening, which is honestly the point. But it’s worth understanding, because it’s one of the few places in the tax code that quietly works in your favor, and knowing the number helps you tell the difference between a real raise and a raise that just keeps up with prices.

Bloomberg Tax released its projected 2027 brackets on September 11, based on the same chained CPI measure the IRS itself uses. These aren’t official. The IRS usually confirms the real numbers in October or November. But Bloomberg’s projections have a strong track record of landing close to the final figures, so they’re worth planning around now.

Brackets are projected to widen by 3.2% for 2027, a step up from this year’s 2.7% adjustment. That’s driven by an unusual wrinkle. Bloomberg had to calculate this year’s projection using an 11-month CPI average instead of the usual 12, because last fall’s government shutdown meant the October 2025 inflation reading was never published. Small technical detail, real effect on the final number.

Here’s what that 3.2% looks like in dollars. For single filers, the standard deduction is projected to rise from $16,100 to $16,600. For married couples filing jointly, from $32,200 to $33,200. The 12% bracket for joint filers would stretch to cover income up to $104,050, about $3,250 higher than this year’s cutoff.

Here’s where each rate would kick in for 2027, based on taxable income (after the standard deduction).

Source: Bloomberg Tax projections, September 2026. The IRS will publish official figures in October or November.

Let’s make this concrete instead of abstract. Say Maria is single, earns $90,000, takes the standard deduction, and gets no raise at all between 2026 and 2027. Just the same paycheck, one year later.

In 2026, her taxable income is $90,000 minus the $16,100 standard deduction, or $73,900. Running that through this year’s brackets works out to about $10,970 in federal income tax.

In 2027, that same $90,000 salary minus the new $16,600 standard deduction leaves $73,400 in taxable income. Running that through the wider 2027 brackets comes out to about $10,690.

Same income. About $280 less tax. That’s the whole trick of bracket indexing in one example. Nothing about Maria’s life changed. The brackets just moved to keep the IRS from quietly taxing her more just because everything got a little more expensive.

Here’s the part that trips people up. If your employer gives you a 3.2% raise next year, you haven’t gotten ahead. You’ve broken even. Your buying power is identical to where it was, and the tax brackets moved just enough to keep your effective rate roughly flat too.

If your raise comes in under 3.2%, you’re losing ground: your income isn’t keeping pace with inflation, and wider brackets only soften the hit. If you land above 3.2%, that’s when you’re genuinely getting ahead, and it’s worth checking whether that extra income pushes you into a higher bracket for only the portion above the line, not your whole paycheck. Nobody gets pushed into a higher rate on their entire income. Only the dollars inside each bracket get taxed at that bracket’s rate.

This matters most for a few specific moves. If you’re planning a Roth conversion, timing it against next year’s wider brackets could mean converting a bit more before you cross into a higher rate. If you’re negotiating a raise or a new salary, knowing the 3.2% line gives you a real benchmark for what counts as actually getting ahead versus just keeping pace. And if you’re close to a bracket boundary this year, it’s worth running your numbers both ways before December 31. Bumping your 401(k) contribution is one of the simplest ways to pull taxable income back under a bracket line, and the 2027 401(k) limit is likely rising too.

Bracket indexing isn’t Congress cutting your taxes. It’s the tax code doing the bare minimum to keep pace with a dollar that buys less every year. Without it, you’d get what economists call bracket creep: your paycheck goes up just to match rising grocery and rent bills, but the IRS treats that cost-of-living bump as if it were real extra income and taxes more of it. Indexing brackets to inflation is how the system avoids quietly raising taxes on everyone just because prices went up. It’s been part of the tax code since the 1980s, and it applies whether Congress is arguing about anything else or not.

That’s also why a 3.2% bracket widening isn’t something to celebrate loudly. It’s closer to a treadmill staying level. You’re not falling behind, but you’re not getting ahead either. The people who actually benefit here are the ones whose raises, bonuses, or business income outpace 3.2%. Everyone else is roughly breaking even before you even look at state taxes, which have their own separate inflation rules (or none at all, depending on where you live).

One more thing worth knowing: these numbers aren’t law yet. The IRS has to issue its own Revenue Procedure, typically in October or November, to make 2027 figures official. Bloomberg’s projections have historically landed close, but don’t file your 2027 return off an unofficial estimate. Treat this as a planning tool for now, not a citation.

If you want to see what any of this actually does to your own paycheck rather than a hypothetical $90,000 example, that’s a much faster question to answer with your real numbers plugged in. Ask Sense AI in the SuperMoney app to run your actual income and filing status through both the current and projected brackets, and it will show you where you land, so you know whether a raise, a bonus, or a Roth conversion pushes you somewhere new before it happens, not after you file.