What the Midterm Results Could Mean for Your Taxes in 2027
The Democrats have flipped the House and the Senate, and now control Congress, which could put new tax proposals on the table.
What could it mean for your taxes in 2027?
President Donald Trump retains veto power, meaning major tax legislation could face significant hurdles. For now, existing tax provisions remain in place, so don’t expect changes to happen overnight.
Read More: What the Midterm Results Could Mean For Your Money Before 2027
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"Don't confuse political headlines with changes to the tax code," said Peter Diamond, a Federally Licensed Tax, Accounting, Real Estate, and Structure and Certified Bankability Expert®. "The tax laws already in place don't disappear because of an election. In the short term, I expect business as usual."
With that in mind, there are several things to watch for in 2027.
Could Federal Income-Tax Rates Increase?
Current individual income-tax brackets are likely to stay the same. For 2026, the top 37% tax bracket begins above $640,600 in taxable income for single filers and $768,700 for married couples filing jointly, per the IRS.
However, higher-income taxpayers could face different rates or changes to income thresholds. Democratic senators have proposed tax increases that would target the wealthy, the Tax Foundation reported.
These are possibilities and not enacted changes yet, but there is one thing to look out for now.
“The change that is certain is the annual inflation adjustment, and the IRS is publishing the official 2027 figures around now,” said Tim Grimsditch, Managing Director at Unbiased.
Will the Child Tax Credit Change?
The child tax credit is less likely to face elimination, Diamond said. Instead, lawmakers could consider expanding benefits for lower-income families while tightening eligibility for higher earners.
Currently, the credit is worth up to $2,200 per qualifying child under age 17, with up to $1,700 potentially refundable in 2026, per the Tax Policy Center. And the credit begins phasing out when modified adjusted gross income exceeds $200,000 for individual filers and $400,000 for married couples filing jointly.
"I could see bipartisan support for maintaining or expanding the child tax credit," Diamond said.
Will Your Taxes Change When You File in 2027?
There's an important distinction between filing taxes in 2027 and paying taxes on income earned in 2027.
"The return you file in 2027 generally covers your 2026 income, which is already determined, and the taxes you owe on money earned during 2027 are a separate question," Grimsditch explained.
What Tax Breaks Are Available for Older Americans?
Older taxpayers also have an additional deduction to consider. The deduction of up to $6,000 for individuals age 65 and older, or up to $12,000 for qualifying married couples, is scheduled to remain available through 2028, per the IRS.
The benefit phases out at higher income levels, so eligibility is important.
"It isn't disappearing in 2027," Grimsditch said. "It's worth checking whether you qualify rather than assuming."
5 Tax Changes To Watch in 2027
Things will stay the same for the time being, but there are five areas to watch, according to Diamond.
Higher-income taxes: Potential increases to top individual tax rates or changes to income thresholds.
Corporate taxes: Proposals to increase the current 21% federal corporate income-tax rate.
Capital gains taxes: Potential higher rates or additional taxes on investment income for wealthy taxpayers.
SALT deductions: Further negotiations over the state and local tax deduction.
Family and worker tax benefits: Potential changes to child credits, refundable credits and temporary deductions for tips, overtime and seniors.
How Should Taxpayers Prepare for 2027?
Diamond emphasizes not letting political fears dictate your finances. Instead, practice sound financial habits.
"Control what you can control. Plan intelligently, stay disciplined, and keep building wealth for yourself and your family," Diamond said.
Grimsditch takes a similarly practical approach. He recommends working with a financial advisor to review tax strategies and says taxpayers should "build a budget around the rules in place rather than a change in either direction."
Regardless of any changes that might come ahead, staying informed, understanding the tax laws currently in place and planning ahead can help taxpayers navigate uncertainty.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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