IRS 2027 inflation figures raise the itemizing bar for donors and lift the annual gift exclusion to $20,000

The IRS published its 2027 inflation adjustments on November 5, 2026, in Revenue Procedure 2026-35, and several of the new numbers bear on charitable giving. The standard deduction rises again, which raises the level a household's deductions must pass before itemizing makes sense, while the limits on tax-free gifts to individuals and on the estate tax exclusion also go up. The figures generally apply to returns filed in 2028, the IRS said.

Why the standard deduction matters to donors

The IRS says a taxpayer should itemize when total allowable itemized deductions are greater than the standard deduction. In 2027, a couple filing jointly will need more than $33,200 in itemized deductions to clear that test, up from $32,200 in 2026. Itemizers' gifts then count only above a floor of 0.5% of the donor's contribution base, under a 2025 law explained in our guide to the deduction rules.

For people who don't itemize, the same law allows a deduction of up to $1,000 of cash gifts to eligible charities, or $2,000 on a joint return, the IRS says. Section 70424 writes those amounts into the tax code with no inflation adjustment, and Revenue Procedure 2026-35 does not list them. So the allowance stays where it is while the standard deduction climbs.

The law also trims the value of itemized deductions for the highest earners, by 2/37 of the smaller of those deductions or the income above the point where the 37% rate begins. That starting point moves up in 2027, as the table shows.

New numbers for fundraisers

Charities that send donors a mug or a calendar get new limits too. Section 3.35 of the procedure sets the 2027 amounts for benefits a donor can receive without losing a full deduction: $14.33, $71.65 and $143.30, up from $13.90, $69.50 and $139 in 2026.

The IRS explains in Publication 1771 how such guidelines work, using 2023 amounts. A benefit counts as insubstantial if it is worth no more than 2% of the payment or a dollar cap, whichever is less, or if the donor pays at least a set sum and receives only low-cost items carrying the charity's name or logo. By our reading of how the 2023 figures line up, the 2027 cap is $143.30, the set sum is $71.65 and the low-cost limit is $14.33. The publication adds two conditions: the payment comes during a fundraising campaign, and the charity tells the donor how much of it is a deductible contribution. Charities can check their own case with the IRS.

Gifts to people and estates

Two other figures affect families moving wealth. A donor can give up to $20,000 to any person in 2027, apart from gifts of future interests, without it counting toward taxable gifts, up from $19,000. The basic exclusion amount for estates of people who die in 2027 is $15.48 million, up from $15 million.

What is still to come

The procedure does not cover qualified charitable distributions from IRAs. The 2026 limit of $111,000 came in a separate document, Notice 2025-67, which the IRS announced on November 13, 2025. The IRS's list of this month's news releases showed no 2027 equivalent as of November 5. Our guide to IRA gifts explains how the current rules work.