The Internal Revenue Service has announced inflation-related tax adjustments for the 2027 tax year, increasing standard deductions, child tax credits and income thresholds that could affect Brooklyn households, workers and small businesses, according to Patch.
The changes, announced Nov. 5,cover nearly 70 federal tax provisions and will generally apply to tax returns filed in 2028.
The standard deduction for married couples filing jointly will increase by $1,000 to $33,200, while single filers will qualify for a $16,600 deduction, up $500.
Heads of household will receive a standard deduction of $24,925.
The maximum federal child tax credit will rise by $100 to $2,300 per qualifying child, with up to $1,800 potentially refundable. The maximum earned income tax credit for eligible taxpayers with three or more qualifying children will also increase to $8,496, up from $8,231 in 2026.
The adjustments could provide additional tax benefits to eligible Brooklyn families and lower-income workers as households continue to manage everyday expenses. However, the actual savings will depend on income, filing status, eligibility for credits and other individual circumstances.
Other changes include an increase in the annual health flexible spending account contribution limit to $3,500, a maximum adoption tax credit of $18,250 and a higher annual gift tax exclusion of $20,000 per recipient. Small businesses will also be able to claim up to $2.64 million in qualifying Section 179 equipment and property deductions.
Federal income tax brackets will also shift upward to account for inflation, although the top marginal tax rate will remain at 37%. Personal exemptions will remain at zero.
Brooklyn taxpayers should note that the adjustments will not affect federal returns filed in early 2027 for the 2026 tax year.
Residents can review the complete list of changes in IRS Revenue Procedure 2026-35 or consult a qualified tax professional to determine how the new provisions may affect their finances.
