Your clients are set for inflation-fueled increase in income tax brackets for 2027, according to new research.
Bloomberg Tax & Accounting has released its 2027 Projected U.S. Tax Rates giving financial advisors a rare head start on year-ahead planning before the IRS releases its official figures.
The projections reflect a 3.2% inflation adjustment from 2026, larger than the 2.7% increase seen from 2025 to 2026, and carry meaningful implications for bracket management, Roth conversion strategy, and standard deduction planning across a wide range of client profiles.
The early release is designed to give tax and financial planning professionals time to model client scenarios, stress-test income strategies, and identify planning windows months before year-end deadlines arrive.
"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 Arlington, Virginia. "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."
The 2027 projections show all seven federal income tax brackets shifting upward due to inflation indexing.
For married couples filing jointly, the 22% bracket rises from a top threshold of $211,400 in 2026 to a projected $218,250 in 2027, the 24% bracket ceiling moves from $403,550 to $416,650, and the top 37% rate kicks in above $793,650, up from $768,700 in 2026.
For single filers, the 22% bracket top moves from $105,700 to a projected $109,125, and the 37% rate threshold rises from $640,600 to $661,375. The wider brackets reduce the risk of bracket creep for clients whose income grows modestly with inflation, a point advisors can use in client conversations around year-end income timing and Roth conversion sizing.
The standard deduction also increases substantially. Married couples filing jointly would see the deduction climb from $31,500 in 2026 to a projected $33,200 in 2027, a $1,700 increase that may shift the calculus for clients sitting near the itemization threshold.
One complicating factor is that the Bureau of Labor Statistics did not report October 2025 data, which Bloomberg Tax noted means its chained Consumer Price Index calculation for this cycle is based on an 11-month average rather than the standard 12. The firm flagged this as an unusual technical wrinkle but maintained confidence in its projections.
The 2027 projections also incorporate adjustments stemming from the One Big Beautiful Bill Act (OBBBA), the sweeping tax legislation signed into law on July 4, 2025, that permanently extended the Tax Cuts and Jobs Act rate structure and added several new provisions.
For those who have been navigating the post-OBBBA planning environment, the 2027 projections add a new layer. The OBBBA modified the employer-provided child care credit and adjusted the threshold for information-at-source reporting requirements, both of which feed into the Bloomberg Tax projections and affect corporate and passthrough planning.
For individual clients, the report notes varied income tax rates with steeper adjustments at lower brackets, a technical consequence of OBBBA's bracket restructuring that advisors serving middle-income clients should monitor.
The Alternative Minimum Tax (AMT) exemption which is a key threshold for higher-income clients also rises across all filing categories. The exemption for married filing jointly increases from $140,200 in 2026 to a projected $144,700 in 2027, providing modestly more AMT headroom for affected clients.
The practical value of early projections lies in timing. Advisors who use the September 2026 numbers can begin modeling Roth conversion amounts, reviewing income deferral strategies, and identifying clients for whom the expanded brackets create favorable windows, all before the typical Q4 scramble.
For wealth managers working with tax-integrated planning across their practice, the bracket shift may also inform asset location decisions, particularly for clients with significant taxable accounts where dividend income or capital gains could interact with bracket thresholds.
The Bloomberg Tax projections flow directly into the firm's software suite, including Bloomberg Tax Provision, Bloomberg Tax Fixed Assets, and Bloomberg Tax Workpapers, allowing practitioners to carry updated numbers into their existing workflows without manual re-entry.
For advisors thinking about the bigger picture, understanding how the OBBBA has reset long-term tax planning particularly around Roth conversions and estate strategy, is the necessary context for interpreting where 2027 bracket projections fit into a multi-year plan.
With tax rates now permanent under the OBBBA rather than subject to a sunset, advisors can shift focus from deadline-driven urgency to deliberate, year-by-year income management.
The IRS typically releases its official inflation adjustments for the following year in October or November. Bloomberg Tax's September release gives advisors a roughly six-to-eight week advantage for initial scenario modeling.
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