Federal Tax Logic (2027 Projected)
STATUS: ESTIMATED / NOT FINAL Last Updated: December 2025
This document details the federal tax calculation logic implemented in the Retirement Tax Plan application for the tax year 2027.
[!WARNING] This data is PROJECTED. The IRS typically releases official inflation adjustments for 2027 in Oct/Nov 2026. This model assumes a 3% Inflation Adjustment over the 2026 baseline. It assumes the Tax Cuts and Jobs Act (TCJA) provisions remain expired (high rates, lower standard deduction).
1. Methodology
- Baseline: 2026 Tax Config (Post-TCJA Expiration).
- Inflation Factor: 1.03x (3%).
- Rounding: Standard deductions rounded to nearest $50; Brackets to nearest $25.
2. Standard Deduction
| Filing Status | Standard Deduction |
|---|---|
| Single | $16,600 |
| Married Filing Separately (MFS) | $16,600 |
| Married Filing Jointly (MFJ) | $33,200 |
| Head of Household (HoH) | $24,900 |
Senior Bonus (Age 65+)
- Single / HoH: $2,100 additional deduction.
- MFJ / MFS: $1,700 additional deduction per person.
3. Ordinary Income Tax Brackets (Projected)
| Rate | Single | MFJ | HoH | MFS |
|---|---|---|---|---|
| 10% | $0 - $12,775 | $0 - $25,550 | $0 - $18,025 | $0 - $12,775 |
| 12% | $12,776 - $51,900 | $25,551 - $103,800 | $18,026 - $68,800 | $12,776 - $51,900 |
| 22% | $51,901 - $108,875 | $103,801 - $217,750 | $68,801 - $109,175 | $51,901 - $108,875 |
| 24% | $108,876 - $207,825 | $217,751 - $415,650 | $109,176 - $208,050 | $108,876 - $207,825 |
| 32% | $207,826 - $263,900 | $415,651 - $527,800 | $208,051 - $265,750 | $207,826 - $263,900 |
| 35% | $263,901 - $659,800 | $527,801 - $791,750 | $265,751 - $664,350 | $263,901 - $659,800 |
| 37% | $659,801+ | $791,751+ | $664,351+ | $659,801+ |
4. Long-Term Capital Gains (LTCG) (Projected)
| Rate | Single | MFJ | HoH | MFS |
|---|---|---|---|---|
| 0% | $0 - $51,350 | $0 - $102,700 | $0 - $68,750 | $0 - $51,350 |
| 15% | $51,351 - $566,500 | $102,701 - $636,550 | $68,751 - $601,500 | $51,351 - $566,500 |
| 20% | $566,501+ | $636,551+ | $601,501+ | $566,501+ |