Checked on November 11, 2026
On November 5, 2026, the IRS published its inflation adjustments for tax year 2027. For small businesses, the headline Section 179 limit is $2,640,000. The 2027 brackets run from 10% to 37%, and the 37% rate starts over $661,375 for single filers and over $793,650 for married couples filing jointly. These are 2027 figures, and the IRS says they generally apply to returns filed in 2028, not the returns people file in 2027.
Revenue Procedure 2026-35 provides the full tables and applies to taxable years beginning in 2027. The useful way to sort the update is by business deductions and limits, employer benefits, and the owner's household.
What did the IRS announce for 2027?
According to news release IR-2026-133, the IRS adjusted almost 70 tax provisions for tax year 2027. The release includes individual tax rate schedules, standard deduction amounts, Section 179 limits, and the child tax credit.
The timing is the first detail to put on your planning page. The IRS release says the 2027 adjustments generally apply to returns filed in 2028. They are not the figures for returns filed in 2027.
How much can my business expense under Section 179 in 2027?
The IRS release sets the 2027 Section 179 limit at $2,640,000, up from $2,560,000 for 2026. It also sets the Section 179 limit for sport utility vehicles at $33,100, up from $32,000 for 2026.
Revenue Procedure 2026-35 adds the spending threshold. The $2,640,000 limit is reduced dollar for dollar, but not below zero, by the amount that the cost of Section 179 property placed in service in 2027 exceeds $4,230,000.
For a practical review, list property you expect to place in service in 2027 and put the expected total beside both the $2,640,000 limit and the $4,230,000 threshold. Keep the $33,100 SUV figure on a separate line so it is not lost in the larger equipment total.
What are the 2027 Section 199A thresholds?
For the qualified business income deduction, Revenue Procedure 2026-35 lists these threshold and phase-in range amounts for 2027:
| Return type | Threshold amount | Phase-in range amount |
|---|---|---|
| All other returns (not married filing jointly or separately) | $208,300 | $283,300 |
| Married filing jointly | $416,600 | $566,600 |
The same Revenue Procedure says a taxpayer with at least $1,030 of qualified business income is an applicable taxpayer. For that taxpayer, the minimum deduction for active qualified business income is $415.
When reviewing a 2027 projection, place the amount for your return type beside the projection and keep the IRS table with the planning file so the relevant threshold remains visible during review.
What other business limit matters for 2027?
For the excess business loss limit, Revenue Procedure 2026-35 sets the 2027 amount at $264,000, or $528,000 for a joint return. If a planning projection approaches either figure, flag it alongside the Section 179 and Section 199A amounts for review.
What changes for employee benefits in 2027?
Revenue Procedure 2026-35 provides several 2027 figures that an employer may need when reviewing a cafeteria plan, commuter benefits, or the small employer health insurance credit.
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Learn About Our Services| Employer item | 2027 amount |
|---|---|
| Employee salary reduction for a health FSA | $3,500 |
| Health FSA carryover, if the plan allows it | $700 |
| Transit passes and commuter vans | $350 per month |
| Qualified parking | $350 per month |
| Small employer health insurance credit dollar amount | $35,162.04 |
The Revenue Procedure says the $350 monthly amount for transit passes and commuter vans can be excluded from an employee's income, as can up to $350 a month for qualified parking. It uses $35,162.04 both to limit the small employer health insurance credit and to determine who counts as an eligible small employer.
What are the 2027 tax brackets and standard deduction?
The IRS release lists the following individual rates and income thresholds for single filers and married couples filing jointly in 2027:
| Rate | Single | Married filing jointly |
|---|---|---|
| 37% | Over $661,375 | Over $793,650 |
| 35% | Over $264,550 | Over $529,100 |
| 32% | Over $208,325 | Over $416,650 |
| 24% | Over $109,125 | Over $218,250 |
| 22% | Over $52,025 | Over $104,050 |
| 12% | Over $12,800 | Over $25,600 |
| 10% | $12,800 or less | $25,600 or less |
The same IRS release sets the 2027 standard deduction at $33,200 for married couples filing jointly, an increase of $1,000 from 2026. The amount is $16,600 for single filers and married people filing separately, and $24,925 for heads of household.
For the owner's household, the IRS release sets the maximum 2027 child tax credit at $2,300, up $100 from 2026. Up to $1,800 can be refundable, also up $100.
What should a small-business owner do with these numbers now?
The IRS supplies the amounts. The following checklist is practical planning guidance from this article:
- List large property purchases expected to be placed in service in 2027, then compare the total with the Section 179 limit and spending threshold.
- Put the Section 199A threshold and phase-in range amount for your return type on the same page as the 2027 projection.
- Ask the benefits administrator whether the health FSA will offer the $700 carryover and whether employee materials reflect the $3,500 salary reduction limit.
- Review payroll and benefits settings for the $350 monthly transit and parking amounts.
- Place the household filing status, relevant rate thresholds, standard deduction, and child tax credit figures in the household planning file.
- Flag a projected business loss that may approach $264,000, or $528,000 for a joint return.
This article provides information, not tax advice. Before acting on these figures, check your 2027 plan with a qualified tax professional.
How can I keep customer calls covered while I plan?
While you work through a 2027 plan, SkyAria Voice Assistant can answer incoming business calls around the clock, understand the request, book an appointment, and send written context to your team while working with your existing business number.
Where can I read related PATech Labs tax guides?
These PATech Labs pages cover neighboring tax topics. None is a guide to the 2027 figures in this article:
- Safe harbor rules for quarterly estimated tax
- How to verify an EIN and use the IRS Business Tax Account
- Tax filing extensions and fake government letters
What else do owners ask about the 2027 IRS figures?
Do these numbers apply to the return I file next spring?
No. The IRS release says the tax year 2027 adjustments generally apply to returns filed in 2028, not returns filed in 2027.
What is the Section 179 SUV limit for 2027?
The IRS release sets the Section 179 limit for sport utility vehicles at $33,100 for 2027, up from $32,000 for 2026.
What is the excess business loss limit for 2027?
Revenue Procedure 2026-35 sets the amount at $264,000, or $528,000 for a joint return.
What is the maximum child tax credit for 2027?
The IRS release sets the maximum at $2,300, with up to $1,800 refundable. The central timing point remains the same: these are tax year 2027 figures that generally apply to returns filed in 2028.