On November 5, 2026, the IRS published its tax year 2027 inflation adjustments for almost 70 tax provisions. The key point first: according to the IRS release, these numbers generally apply to tax returns filed in 2028, not to the return you file next spring. This short video covers the numbers that matter most for a small business.
It is for small-business owners who buy equipment, pay themselves from the business or have employees, and who want to plan 2027 early.
Read the full guide: 2027 tax brackets and Section 179 limit for small business
Section 179
For tax year 2027, a business can expense up to $2,640,000 of section 179 property, up from $2,560,000 for 2026. The section 179 limit for sport utility vehicles is $33,100. Revenue Procedure 2026-35 adds the phase-out: the $2,640,000 limit is reduced, dollar for dollar but not below zero, by the amount by which the cost of section 179 property placed in service in 2027 exceeds $4,230,000.
Tax brackets for you as an owner
The 2027 individual brackets run from 10% to 37%. The top rate of 37% applies to single filers with incomes over $661,375, or over $793,650 for married couples filing jointly. The lowest rate of 10% applies to single incomes of $12,800 or less. The standard deduction for 2027 is $16,600 for single filers and $33,200 for married couples filing jointly.
If you have employees
For employers with a cafeteria plan, employees can put up to $3,500 of salary into a health flexible spending arrangement in 2027, and if the plan allows carryover, up to $700 of unused money can carry over. Up to $350 a month for transit passes and commuter vans, and up to $350 a month for qualified parking, can be excluded from the employee's income.
What to do now
Note these numbers in your 2027 plan, especially before a large equipment purchase, and go over them with your tax professional. All figures come from the IRS release IR-2026-133 and Revenue Procedure 2026-35.
This page is information, not tax advice.