Estate Tax Calculator

Understanding the Federal Estate Tax

The federal estate tax is a tax on the transfer of property upon death. It applies to the total fair market value of a deceased person's assets minus allowable deductions. Only estates exceeding the applicable exemption amount — $13.99 million for 2025 or $15 million for 2026 — owe federal estate tax. The tax rates range from 18% to 40% on the taxable amount above the exemption.

How the Estate Tax Calculator Works

1. Enter your gross estate value — the total fair market value of all assets including real estate, investments, bank accounts, retirement funds, business interests, and life insurance proceeds payable to the estate.
2. Subtract allowable deductions — funeral and administrative expenses, outstanding debts and mortgages, the unlimited marital deduction (for assets left to a surviving U.S. citizen spouse), charitable bequests, and other deductions.
3. Add prior taxable gifts — lifetime gifts that exceeded the annual gift tax exclusion ($19,000 per recipient for 2026) are added back to compute the tentative tax base.
4. Apply graduated tax brackets — the tentative tax is calculated using progressive rates from 18% to 40%.
5. Subtract the unified credit — this credit effectively exempts the first $13.99M (2025) or $15M (2026) from tax.

Federal Estate Tax Brackets (2025–2026)

Key Deductions That Reduce Estate Tax

• Unlimited Marital Deduction: Any assets left to a surviving U.S. citizen spouse are completely exempt from estate tax. This is one of the most powerful estate planning tools available.
• Charitable Deduction: Bequests to qualified charitable organizations reduce the taxable estate dollar-for-dollar with no limit.
• Debts and Expenses: Outstanding mortgages, loans, funeral costs, and estate administration expenses are fully deductible.

No 2026 Exemption Sunset

The Tax Cuts and Jobs Act of 2017 roughly doubled the estate tax exemption through 2025, and it was scheduled to fall back to about $7 million in 2026. The One Big Beautiful Bill Act, signed on July 4, 2025, removed that sunset: the exemption is $15 million per person for 2026 and is indexed for inflation after that. Lifetime gifting, irrevocable trusts and charitable giving are still useful for estates above the exemption, but there is no longer a deadline to use the old exemption before it shrinks.

Estate Tax vs. Inheritance Tax

The federal estate tax is paid by the estate before assets are distributed. An inheritance tax, by contrast, is paid by the beneficiary receiving assets. There is no federal inheritance tax, but five states impose one (Iowa repealed its tax for deaths from 2025): Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state with both an estate tax and an inheritance tax.

Tips for Reducing Estate Tax Liability

• Annual Gifting: Give up to $19,000 per recipient per year (2026) without using any of your lifetime exemption.
• Irrevocable Life Insurance Trust (ILIT): Removes life insurance proceeds from your taxable estate.
• Spousal Portability: A surviving spouse can use the deceased spouse's unused exemption by filing Form 706, effectively doubling the couple's exemption.
• Charitable Remainder Trusts: Provide income during your lifetime and reduce the taxable estate with a charitable deduction.
• Grantor Retained Annuity Trusts (GRATs): Transfer asset appreciation out of your estate at minimal gift tax cost.

Frequently Asked Questions

What is the federal estate tax?

The federal estate tax is a tax on the transfer of property at death. It applies to estates exceeding the applicable exemption amount ($13.99 million for 2025, $15 million for 2026). Tax rates range from 18% to 40%.

What is the estate tax exemption for 2025 and 2026?

The federal estate tax exemption is $13.99 million for 2025 and $15 million for 2026 per individual. Married couples can effectively shelter up to double this amount through spousal portability.

What is the unlimited marital deduction?

The unlimited marital deduction allows you to transfer any amount of assets to a surviving U.S. citizen spouse without incurring estate tax. This defers the tax until the surviving spouse's death.

How do prior taxable gifts affect estate tax?

Lifetime taxable gifts (amounts exceeding the $19,000 annual exclusion per recipient for 2026) are added to the taxable estate to determine the tentative tax base. The unified credit offsets both gift and estate taxes up to the exemption amount.

What happens to the estate tax exemption in 2026?

It does not drop. The One Big Beautiful Bill Act, signed on July 4, 2025, permanently set the exemption at $15 million per person for 2026, indexed for inflation in later years, so the sunset expected under the 2017 tax law will not happen.