Estate Tax Calculator — Free Federal & State Estimator (2025) Updated Mar 2026
Enter your total assets above and get an instant estimate — federal + state.
Key Takeaways — 2025 Estate Tax Facts
- 2025 federal exemption: $13.99 million per person — estates below this owe $0 federal tax
- Married couples: $27.98 million combined exemption with portability election
- Top tax rate: 40% on amounts above the exemption — one of the highest US tax rates
- 2026 sunset warning: Exemption drops to ~$7 million unless Congress acts — plan now
- State trap: 12 states + DC have their own estate taxes starting as low as $1 million (Oregon)
- Less than 0.2% of estates pay federal estate tax — but state taxes catch many more
What Is Estate Tax?
An estate tax is a government tax on the total value of money and property that a person leaves behind when they die. It is sometimes called a "death tax." The tax is paid by the estate (not the heirs) before any money or assets are divided up.
In the United States, the federal government charges estate tax on large estates. Several states charge their own estate taxes on top of that. Most people do not pay estate tax because the government gives a large tax-free amount called the exemption. In 2025, you must have more than $13.99 million before any federal tax is due.
What Assets Are Included in the Estate?
The estate includes nearly everything owned at death:
- Cash, bank accounts, savings
- Stocks, bonds, mutual funds, ETFs
- Real estate (home, rental property, land)
- Retirement accounts (401k, IRA, pension)
- Life insurance proceeds if you owned the policy
- Business ownership interests
- Cars, jewelry, art, collectibles
- Money owed to you (loans, receivables)
What Is NOT Included?
- Assets left directly to a surviving spouse (unlimited marital deduction)
- Assets donated to qualified charities
- Life insurance held in an ILIT trust
- Annual gifts within the $19,000 per person exclusion (2025)
How to Use This Calculator
This calculator gives you a fast estimate of your potential federal estate tax. Here are the 7 steps:
- Enter your total assets — Add up everything you own: home value, investments, retirement accounts, business, and personal property.
- Enter your total debts — Mortgages, loans, credit card balances, and other debts are subtracted from your estate.
- Add life insurance — Include death benefits from life insurance policies you own.
- Add prior taxable gifts — Large gifts you made during your lifetime (above the annual exclusion) reduce your remaining exemption.
- Select your filing status — Single or married. Married couples can combine exemptions using portability.
- Choose your state — Several states have separate, lower estate tax exemptions.
- Review your results — The calculator shows your taxable estate, estimated tax, and potential savings strategies.
Estate Tax Formula Explained
Step 2: Taxable Estate = Gross Estate − Debts − Deductions
Step 3: Taxable Amount = Taxable Estate − Federal Exemption ($13.99M in 2025)
Step 4: Estate Tax = Apply progressive rates (18% − 40%) to Taxable Amount
Worked Example — $19 Million Estate (2025)
| Item | Amount |
|---|---|
| Gross Estate (home + investments + business + life insurance) | $19,000,000 |
| Minus: Debts & deductions | − $380,000 |
| Taxable Estate | $18,620,000 |
| Minus: 2025 Federal Exemption | − $13,990,000 |
| Amount Subject to Tax | $4,630,000 |
| Tax on first $1,000,000 (max bracket below 40%) | $345,800 |
| Tax on remaining $3,630,000 at 40% | $1,452,000 |
| Total Estimated Federal Estate Tax | $1,797,800 |
| Effective rate on total estate | 9.5% |
This example shows why estate planning matters even for estates well into the tens of millions. With the right legal tools, much of this $1.8 million tax bill could potentially be reduced or eliminated.
Types of Estate and Death Taxes
Not all "death taxes" are the same. Here are the 6 main types:
| Tax Type | Who Pays | Where It Applies | Key Feature | Example Rate |
|---|---|---|---|---|
| Federal Estate Tax | The estate | All 50 US states | Only on estates over $13.99M (2025) | Up to 40% |
| State Estate Tax | The estate | 12 states + DC | Lower exemptions (as low as $1M) | Up to 20% |
| Inheritance Tax | The beneficiary | 6 US states | Paid by heir receiving assets | Up to 18% |
| Generation-Skipping Tax (GST) | The estate or trust | Federal (US) | On transfers that skip a generation | 40% flat |
| Gift Tax | The giver | Federal (US) | Unified with estate tax exemption | Up to 40% |
| Probate Fees | The estate | All US states (varies) | Court fees to transfer assets | 1–5% of estate |
Estate Tax vs Inheritance Tax — Key Differences
People often confuse estate tax and inheritance tax. They are different in who pays and when:
| Feature | Estate Tax | Inheritance Tax |
|---|---|---|
| Who pays? | The deceased person's estate | The person receiving the money/assets |
| When is it paid? | Before assets are divided | After assets are received |
| US federal? | Yes — federal + state | No federal tax; 6 states only |
| Exemption | $13.99M (federal, 2025) | Varies by state and relationship |
| Rate | 18% – 40% | 0% – 18% (varies by state) |
| Spouses exempt? | Yes — unlimited marital deduction | Yes in most states |
| Children exempt? | Not automatically | Often exempt or lower rate |
| States with both? | Maryland has both | Maryland has both |
2025 Estate Tax Rates & Exemptions — Quick Reference
Federal Exemption History (2017 – 2026+)
| Year | Individual Exemption | Married Couple (Portability) | Annual Gift Exclusion |
|---|---|---|---|
| 2022 | $12.06M | $24.12M | $16,000 |
| 2023 | $12.92M | $25.84M | $17,000 |
| 2024 | $13.61M | $27.22M | $18,000 |
| 2025 | $13.99M | $27.98M | $19,000 |
| 2026 (if sunset) | ~$7M* | ~$14M* | TBD |
*2026 estimate assumes reversion to pre-TCJA levels adjusted for inflation. Congress may extend or modify the law before then.
Federal Estate Tax Rate Schedule (2025)
| Taxable Amount Above Exemption | Tax Rate | Base Tax on Lower Bracket |
|---|---|---|
| $0 – $10,000 | 18% | $0 |
| $10,001 – $20,000 | 20% | $1,800 |
| $20,001 – $40,000 | 22% | $3,800 |
| $40,001 – $60,000 | 24% | $8,200 |
| $60,001 – $80,000 | 26% | $13,000 |
| $80,001 – $100,000 | 28% | $18,200 |
| $100,001 – $150,000 | 30% | $23,800 |
| $150,001 – $250,000 | 32% | $38,800 |
| $250,001 – $500,000 | 34% | $70,800 |
| $500,001 – $750,000 | 37% | $155,800 |
| $750,001 – $1,000,000 | 39% | $248,300 |
| Over $1,000,000 | 40% | $345,800 |
Estate Tax Rules by Country
United States — Deep Dive
The US federal estate tax has a high exemption, meaning most people never pay it. But 12 states plus Washington D.C. have their own estate taxes — and some start at just $1 million.
States with Estate Tax (2025)
| State | Exemption | Top Rate | Notes |
|---|---|---|---|
| Connecticut | $13.99M (matches federal) | 12% | Only state that matches federal exemption |
| Hawaii | $5.49M | 20% | Highest state rate |
| Illinois | $4M | 16% | No portability between spouses |
| Maine | $6.8M | 12% | Portability allowed |
| Maryland | $5M | 16% | Also has inheritance tax — both can apply |
| Massachusetts | $2M | 16% | All assets taxed once over threshold |
| Minnesota | $3M | 16% | Rising exemption over time |
| New York | $7.16M | 16% | "Cliff tax" — full estate taxed if over 105% threshold |
| Oregon | $1M | 16% | Lowest exemption in the US |
| Rhode Island | $1.77M | 16% | Exemption indexed to inflation |
| Vermont | $5M | 16% | No portability |
| Washington | $2.193M | 20% | Graduated rates; highest tier at 20% |
| Washington D.C. | $4.53M | 16% | Exemption indexed annually |
States with Inheritance Tax (Paid by Beneficiary)
Six states charge people who receive an inheritance: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Spouses are usually exempt; children may get reduced rates. Maryland is the only state with both estate AND inheritance tax.
United Kingdom
The UK calls its equivalent an Inheritance Tax (IHT). The government taxes the estate at 40% on amounts above £325,000 (the "nil-rate band"). An extra £175,000 allowance applies if you leave your home to direct descendants. Married couples can combine allowances for a total of £1 million. Gifts made more than 7 years before death are generally free of IHT.
Canada
Canada has no estate tax or inheritance tax. However, when you die, the government treats it as if you sold all your assets on the day of death. Capital gains tax may apply on the difference between what you paid and the market value. Assets left to a surviving spouse are generally exempt until the second death. Probate fees (called estate administration tax) apply in most provinces.
Australia
Australia abolished estate taxes in 1979. There is no inheritance tax. However, when a beneficiary eventually sells an inherited asset, capital gains tax (CGT) may apply on any growth. Superannuation (retirement) death benefits can be taxed depending on who receives them.
India
India does not have an estate tax or inheritance tax. The old Estate Duty Act was abolished in 1985. However, income tax may apply on income earned from inherited assets after they are received.
International Comparison Table
| Country | Tax Type | Exemption | Top Rate |
|---|---|---|---|
| USA | Federal Estate Tax | $13.99M | 40% |
| UK | Inheritance Tax | £325,000 – £1M couple | 40% |
| Canada | None (deemed disposition) | N/A | ~27% CGT effective |
| Australia | None | N/A | 0% |
| India | None | N/A | 0% |
| Germany | Inheritance Tax | €500K spouse / €400K child | 50% |
| Japan | Inheritance Tax | ¥30M + ¥6M per heir | 55% |
| France | Inheritance Tax | €100K per child | 45% |
Common Estate Tax Mistakes to Avoid
These 7 mistakes cost American families billions of dollars every year:
-
Not filing Form 706 to elect portability
Married couples must file IRS Form 706 within 9 months of the first spouse's death to preserve the unused exemption for the surviving spouse. Skipping this can cost the estate up to $5.6 million in lost exemption.Fix: Even if you owe $0 estate tax at first death, file Form 706 to make the portability election. Always. -
Including life insurance in the estate
If you own a life insurance policy on your own life, the death benefit is included in your taxable estate. A $3 million policy can add $1.2 million in estate tax.Fix: Transfer the policy to an Irrevocable Life Insurance Trust (ILIT) — but do it at least 3 years before death. -
Waiting too long to gift assets
The 2025 exemption of $13.99 million may drop to ~$7 million in 2026. Every dollar gifted now uses the higher exemption and removes future growth from your estate too. -
Ignoring state estate taxes
An Oregon resident with a $1.5 million estate owes $0 federal tax but may owe over $50,000 in Oregon state estate tax. -
Not naming beneficiaries on retirement accounts
Retirement accounts (IRA, 401k) with no named beneficiary go through probate and may be taxed as ordinary income immediately. Always keep beneficiary designations current. -
Titling assets incorrectly
Assets titled in both names, or held in a revocable living trust, are still included in your taxable estate. Irrevocable trusts are required to remove assets from the estate. -
Not updating estate plans after major life changes
Marriage, divorce, births, deaths, and large asset changes all require an estate plan review. Many families use an outdated plan that no longer reflects their wishes or tax situation.
Tax and Legal Considerations
Unified Gift and Estate Tax Exemption
The federal gift tax and estate tax share one lifetime exemption of $13.99 million (2025). Every taxable gift you make during life reduces the exemption left for your estate. Annual gifts up to $19,000 per person (2025) are excluded and do not use your lifetime exemption. Married couples can give $38,000 per person per year with gift-splitting.
Unlimited Marital Deduction
Any assets left to a surviving US citizen spouse pass completely free of estate tax — no dollar limit. This defers the estate tax until the surviving spouse's death. To avoid losing the first spouse's exemption, couples should use a bypass trust or elect portability on Form 706.
Charitable Deduction
Every dollar left to a qualified charity is fully deductible from the estate — no limit. A $10 million bequest to charity reduces the taxable estate by $10 million, potentially saving $4 million in tax. Charitable Remainder Trusts (CRT) and Charitable Lead Trusts (CLT) can provide income during life and estate benefits at death.
Stepped-Up Basis — The Hidden Benefit
When heirs inherit assets, the cost basis resets to the date-of-death fair market value. If your heir sells stock that you paid $10,000 for and is now worth $100,000, they owe capital gains tax only on growth after they inherit it — not the full $90,000 gain. This "step-up" is one of the largest wealth-transfer benefits in the US tax code.
Valuation Discounts
Business interests, minority ownership stakes in family limited partnerships (FLPs), and closely-held company shares may qualify for discounts of 20%–40% on their appraised value for estate tax purposes. These discounts are legal but require proper planning and qualified appraisals.
Portability of the DSUE (Deceased Spousal Unused Exclusion)
When the first spouse dies and their full exemption is not used, the remaining amount (the DSUE) can be transferred to the surviving spouse. Example: first spouse dies with a $6 million estate — they used $6M of their $13.99M exemption, leaving $7.99M transferable as DSUE to the surviving spouse. Combined with the survivor's own $13.99M exemption, the couple can shelter up to $21.98M total.
Estate Planning Strategies by Life Stage
Estate planning is not just for the elderly. Here is what to do at every stage of life:
Your 20s and 30s — Build the Foundation
- Write a will — it costs less than $500 with an attorney
- Name beneficiaries on 401k, IRA, and life insurance
- Set up a durable power of attorney and healthcare directive
- Get life insurance if you have dependents
Your 40s — Protect What You Have Built
- Review and update your will and beneficiaries
- Consider a revocable living trust to avoid probate
- Start annual gifting to reduce your future estate size
- Review life insurance coverage — does it still match your needs?
- Use the Net Worth Calculator to track where you stand relative to the exemption
Your 50s — Serious Estate Planning
- Work with an estate attorney — especially if net worth is above $5M
- Consider irrevocable trusts (ILIT, GRAT, QPRT) to remove assets from estate
- Plan for retirement account distributions (see RMD Calculator)
- Review business succession planning if you own a business
Your 60s — Act Before the 2026 Sunset
- This is the most urgent time to act. The exemption may be cut nearly in half in 2026.
- Make large gifts now using the $13.99M exemption before it drops
- Max out annual gift exclusions ($19,000 per person, $38,000 for couples)
- Review Roth IRA conversion strategies with a tax advisor (see Roth IRA Calculator)
- Create or update your trust documents
Your 70s and Beyond — Finalize and Transfer
- Keep a list of all accounts, passwords, and important documents
- Consider a testamentary charitable trust for both philanthropic goals and estate tax savings
- Review and update powers of attorney and healthcare directives
- Complete any required minimum distributions (see RMD Calculator)
- Work with a financial planner to make sure your retirement assets are optimized
Real Estate Tax Scenarios
Here are 5 real-life situations showing how estate tax works in practice:
Scenario 1 — The Average American: No Estate Tax
Who: Retired couple in Ohio, combined assets $2.4 million
Estate: Home ($500K) + 401k ($800K) + investments ($600K) + savings ($500K)
Result: $2.4M is far below the $27.98M married couple threshold
Federal estate tax: $0
Ohio estate tax: $0 (Ohio repealed its estate tax in 2013)
Action needed: Will, beneficiary designations, power of attorney. No estate tax planning required.
Scenario 2 — The Oregon Property Owner: State Tax Surprise
Who: Retired widow in Portland, Oregon. Estate = $2.8 million
Breakdown: Home ($1.8M) + investments ($700K) + savings ($300K)
Federal estate tax: $0 (below $13.99M federal threshold)
Oregon estate tax: ~$122,000 (over $1M Oregon threshold)
Lesson: Estate tax planning is critical in low-exemption states like Oregon, Massachusetts, and New York, even for modest estates.
Scenario 3 — The Business Owner: Large Estate, Smart Planning
Who: Business owner in Texas, single, estate = $22 million
Without planning: Tax on $22M − $13.99M = $8.01M taxable — estimated tax: ~$3.2 million
With planning: Set up FLP (family limited partnership) with 35% valuation discount, annual gifting of $19K to 4 children for 10 years = $760K transferred. Remaining taxable amount significantly reduced.
Estimated tax with planning: ~$1.4 million — saving ~$1.8 million
Texas has no state estate tax, which helps.
Scenario 4 — The Married Couple: Portability in Action
Who: Married couple in New York. Husband dies with $9M estate.
At first death: $9M estate, $9M exemption used. Remaining DSUE = $13.99M − $9M = $4.99M
Couple files Form 706 to elect portability (critical step).
Wife's later estate: $18M + $4.99M DSUE + her own $13.99M = $18.98M total exemption
Her $18M estate has $0 federal estate tax.
New York state tax on $18M over $7.16M threshold ≈ $1.7 million (NY has no portability)
Lesson: Portability saves huge federal taxes but doesn't help with NY state tax. A bypass trust would help optimize the NY tax.
Scenario 5 — The 2026 Gifting Opportunity
Who: Single investor in California, net worth $16 million in 2025
2025 opportunity: Can gift up to $13.99M lifetime (minus prior gifts) before sunset
Strategy: Gift $6 million to an irrevocable trust in 2025 before exemption drops
2026 estate (if law sunsets): $10M remaining, exemption ~$7M, taxable amount $3M, tax ~$1.2M
Without 2025 gifting: $16M estate in 2026, exemption $7M, taxable $9M, tax ~$3.6M
Savings from acting in 2025: ~$2.4 million
This is why estate attorneys are urging action before December 31, 2025.
Frequently Asked Questions About Estate Tax
About This Estate Tax Calculator
Why Trust CalculatorZone?
The CalculatorZone Estate Tax Calculator is built and maintained by financial content editors and reviewed against IRS publications, state tax codes, and estate planning practitioner guidance. All data — exemption amounts, rate schedules, state thresholds — is sourced from primary government sources and updated for each tax year.
- Data sources: IRS.gov, Form 706 instructions, state revenue department websites, estate planning bar association publications
- Review process: Verified against IRS Rev. Proc. 2024-40 (2025 inflation adjustments)
- Limitations: This tool provides estimates only. Actual tax liability depends on specific asset types, valuation methods, applicable deductions, and applicable state rules. Consult a licensed attorney and CPA for personalized advice.
- Not financial or legal advice: CalculatorZone is an educational resource. No attorney-client or advisor relationship is created by using this tool.
Trusted Resources
Official Government Sources
- IRS: Estate Tax Overview — Official IRS guide to federal estate tax
- IRS Form 706 Instructions — US Estate and Generation-Skipping Transfer Tax Return
- IRS Publication 950 — Introduction to Estate and Gift Taxes
- IRS Form 709 — Gift Tax Return
- Consumer Financial Protection Bureau — Estate and financial planning guidance
Related CalculatorZone Tools
- Net Worth Calculator — Find your total asset value to compare against exemption
- Retirement Calculator — Plan retirement savings and projected estate value
- Compound Interest Calculator — Project how assets grow over time
- Life Insurance Calculator — Calculate coverage and ILIT planning needs
- RMD Calculator — Required minimum distributions for inherited retirement accounts
- Roth IRA Calculator — Roth conversion planning to reduce taxable estate
- Income Tax Calculator — Understand total tax burden including income tax
- IRA Calculator — IRA contribution and growth planning
Important Disclaimer
Always consult a qualified estate planning attorney and a certified public accountant (CPA) before making any decisions based on this information. CalculatorZone is not responsible for decisions made based on these estimates.
Tax rates and exemption amounts are based on publicly available IRS information as of early 2025. State rules, valuation methods, and individual circumstances can significantly affect actual outcomes.
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