OBBBA 2027 Tax Changes — What Changes, What Doesn't
Tax year 2027 is the OBBBA's third act. Here's the plain-English scorecard: which numbers move up with inflation, which stay frozen, which one is already written into law — and which cliff is coming in 2028.
⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.
What Goes Up in 2027
- • Tax brackets: every bracket line rises ~3.2% (projected — IRS confirms late Oct/Nov 2026). Single 37% starts above $661,375 vs. $640,600 in 2026. Bracket calculator →
- • Standard deduction: projected $16,600 single / $33,200 joint / $24,950 head of household (from $16,100 / $32,200 / $24,150).
- • SALT cap: $40,804, up from $40,400 — a statutory 1% ratchet, already law. Phase-down starts at $510,050 MAGI (30% of the excess off the cap, $10,000 floor). SALT detail →
- • Withholding tables: reissued January 2027 for the new brackets — but still blind to OBBBA deductions, so a W-4 adjustment is on you.
What Stays Frozen
- • Overtime premium deduction: cap stays $12,500 single / $25,000 joint. Phase-out still starts at $150,000 / $300,000 MAGI. Calculator →
- • Tips deduction: cap stays $25,000, same phase-out. Calculator →
- • Senior deduction: stays $6,000 per person 65+, phase-out from $75,000 / $150,000. Calculator →
- • Car loan interest deduction: stays $10,000, phase-out from $100,000 / $200,000. Calculator →
- • The rates themselves: 10%–37% is now permanent — the TCJA sunset is dead.
Frozen means shrinking in real terms: brackets inflate ~3% a year, these caps don't.
The 2028 Cliff
Tax year 2028 is the last year for all four OBBBA worker deductions. In 2029 nothing changes (you file the 2028 return in 2029), but planning backwards from the cliff matters now: overtime-heavy workers get three more filing seasons (2025, 2026, 2027) before the deductions disappear, and high-SALT taxpayers keep the enlarged cap through 2029 before it reverts to $10,000 in 2030.
Sources & Effective Dates
- • OBBBA, Public Law 119-21 (signed July 4, 2025) — deduction caps, phase-outs, 2025–2028 window, SALT ratchet §70120 (26 U.S.C. §164(b)(7)).
- • IRS Rev. Proc. 2025-32 (Oct 9, 2025) — official 2026 brackets & standard deduction.
- • Wolters Kluwer projection (Sept 2026 CPI), matching Bloomberg Tax and Thomson Reuters Checkpoint — 2027 brackets & standard deduction, pending the official IRS Revenue Procedure expected late Oct/Nov 2026.
- • SALT 2027 figure ($40,804) is statutory, effective tax year 2027 — not a projection.
Start Here
1. See your 2027 brackets · 2. size your overtime deduction · 3. fix your W-4 — the whole three-step takes about five minutes.
Frequently Asked Questions
Does anything in the OBBBA actually expire in 2027?
No — the big cliff is after tax year 2028, when the overtime premium deduction, tips deduction, senior deduction, and car loan interest deduction all sunset under current law. The SALT cap gets one more year after that: $41,212 in 2028, $41,624 in 2029, then back to $10,000 in 2030.
Why do the OBBBA deduction caps feel smaller every year?
Congress wrote them as fixed dollar amounts with no inflation indexing, while the brackets and standard deduction rise ~3% a year. Your $12,500 overtime cap buys less deduction room each year of the 2025–2028 window.
Is the SALT cap rising in 2027?
Yes, to $40,804 — and unlike everything else on this page that's law, not a projection. The OBBBA set a 1% annual ratchet (26 U.S.C. §164(b)(7)): $40,000 in 2025, $40,400 in 2026, $40,804 in 2027. The phase-down also starts higher: the cap shrinks by 30% of MAGI above $510,050, floored at $10,000.
What should I actually do differently in 2027?
Three things: (1) file a W-4 with your OBBBA deductions in Step 4(b) so the savings arrives per paycheck; (2) keep paystub records of overtime premium and tips — W-2 separate reporting started with tax year 2026, which makes 2027 easier; (3) if you're 65+, don't miss the $6,000-per-person senior deduction. Run the W-4 2027 calculator for the exact numbers.
Will the 2027 standard deduction be official before I file?
Yes. The IRS Revenue Procedure (expected late Oct/Nov 2026) finalizes 2027 numbers well before the 2027 tax year even starts. The projections on this site will be reconciled against it as soon as it publishes.