Estate Tax Estimator
Estimate federal estate tax liability for large estates.
What this calculator does
This calculator gives a first-pass estimate of federal estate tax. Enter the total value of the estate and the deductions available, principally transfers to a surviving spouse and to charity, and it returns the taxable estate after the federal exemption, the estimated tax at the top rate, and the effective rate against the full estate.
The structure is simple even though the planning around it is not. Gross estate less deductions less the exemption gives the taxable amount, and the federal rate on that amount reaches 40 percent. Because the exemption is large and both the marital and charitable deductions are unlimited, most estates arrive at zero, and the calculator's value is largely in showing how far above or below the line you are.
When to use it
Use it as a screening tool. If the result is comfortably zero, federal estate tax is not the thing to plan around, and your attention belongs on state estate or inheritance tax, on probate avoidance, and on beneficiary designations, which matter regardless of size.
If the result is not zero, or is close, the calculator has told you something worth acting on. Estates near the threshold are exactly where portability elections, irrevocable life insurance trusts, charitable bequests, and lifetime gifting of appreciating assets do the most work. It is also worth running the estate as it might look in twenty years, since the exemption and the estate value both move and the gap between them is what matters.
Understanding the inputs
Total estate value should be the gross estate, which is broader than most people assume. It includes real property, investment accounts, retirement accounts, business interests, personal property, and life insurance death benefits on policies you own, valued at date of death rather than at cost.
Deductions should capture transfers to a surviving US citizen spouse, which are unlimited under the marital deduction, and bequests to qualifying charities, also unlimited. Debts, mortgages, funeral costs, and administration expenses are deductible too. If a spouse predeceased and a portability election was filed, the exemption available may be roughly double the individual figure, which this calculator does not apply automatically.
How is this calculated?
Taxable Estate = Total Assets − Deductions − Federal Exemption ($13.61M for 2024).
A worked example
Take a gross estate of $20 million with $3 million passing to charity and to a surviving spouse, leaving $17 million. Against a federal exemption of roughly $14 million for 2025, the taxable estate is about $3 million, and at the 40 percent rate the tax is roughly $1.2 million. Measured against the full $20 million, that is an effective rate of about 6 percent.
Two changes swing that dramatically. If the first spouse died earlier and a portability election was properly filed, the available exemption could be close to $28 million, eliminating the federal tax entirely. Conversely, an estate of the same size in a state with a much lower threshold, such as Oregon or Massachusetts, could face a substantial state bill even when the federal figure is zero.
Limitations and assumptions
This is a rough estimate, not tax advice, and the IRS is the authority. It applies a single flat top rate rather than the graduated schedule, does not track prior taxable gifts that reduce the available exemption, and does not apply portability from a deceased spouse. Any of those can change the answer by seven figures.
It excludes state estate and inheritance taxes, which catch far more families than the federal tax and have much lower thresholds. It also ignores valuation discounts for closely held businesses and fractional interests, generation-skipping transfer tax, qualified terminable interest property trusts, charitable remainder structures, special use valuation for farms, and the Section 6166 instalment election for illiquid business estates. The federal exemption amount is set by legislation and has changed repeatedly, so confirm the current figure. Anyone in range of this tax needs an estate attorney, not a calculator.
Common Questions
- How many estates actually pay federal estate tax?
- Very few. With an exemption in the millions per person and portability effectively doubling it for married couples, well under one percent of estates owe anything. The tax matters intensely for those it touches, at a top rate of 40 percent, and is irrelevant for almost everyone else. State-level taxes catch far more estates.
- What is portability and why does it matter?
- When the first spouse dies, their unused exemption can be transferred to the survivor, potentially doubling the exemption available at the second death. It is not automatic: an estate tax return must be filed for the first spouse within the deadline, even when no tax is due. Failing to file is the most expensive avoidable mistake in estate planning.
- Is life insurance included in my estate?
- Yes, if you own the policy or hold incidents of ownership, the full death benefit counts toward your taxable estate even though the beneficiary receives it tax-free as income. Transferring the policy to an irrevocable life insurance trust removes it, subject to a three-year lookback if the transfer is made shortly before death.
- Do states charge their own estate tax?
- A dozen states and the District of Columbia levy estate tax, and several states impose an inheritance tax on the recipient instead. State exemptions are frequently far lower than the federal one, some in the low millions or below, so an estate owing nothing federally can still face a substantial state bill. A few states have both.
- What is the step-up in basis?
- Assets included in a taxable estate are revalued to fair market value at the date of death, eliminating the unrealised capital gain accumulated during the owner's lifetime. Heirs who sell immediately owe essentially no capital gains tax. It is why holding highly appreciated assets until death is often more tax-efficient than gifting them.
- When is the estate tax return due?
- Nine months after the date of death, with a six-month extension available on request. That is a tight timetable for valuing a business, real estate, or illiquid holdings. Extensions to pay are separate from extensions to file, and interest runs on unpaid tax regardless, so liquidity planning matters as much as valuation.
- Are gifts I made during life added back?
- Taxable gifts above the annual exclusion reduce the exemption available at death, because gift and estate tax share a single unified credit. So gifting does not escape the system, though it does remove future appreciation from the estate, which is the real planning benefit of transferring assets expected to grow.
- How do charitable and marital transfers work?
- Both are unlimited deductions. Anything passing to a surviving US citizen spouse or to a qualifying charity is deducted in full from the gross estate. That is why a well-drafted plan can defer all tax to the second death, and why charitable bequests are often structured to bring a taxable estate back under the exemption.
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