Estate Tax Calculator

Federal estate tax, without the mystique

The federal estate tax is often talked about as if it will hit every well-off family. In reality it applies to a tiny sliver of estates. For 2025, each person can pass roughly $13.99 million to heirs completely free of federal estate tax. A married couple can effectively shield nearly $28 million through a mechanism called portability. Fewer than one in a thousand estates ends up owing anything.

The exemption and the 40 percent top rate

Anything above your remaining exemption is taxed at rates that top out at 40 percent. Because most families never touch the exemption, that 40 percent rate is more of a threat than a reality. For families that do have taxable estates, the tax can still be enormous in absolute dollars, which is why planning matters.

What counts as your estate

Your gross estate includes essentially everything you own or control at death: real estate, retirement accounts, taxable investments, businesses, personal property, and the death benefit of any life insurance policy you own. That last one surprises people. If you own a $2 million policy, that $2 million is added to your estate. Trust structures like an Irrevocable Life Insurance Trust (ILIT) exist to keep insurance out of the taxable estate.

Portability for couples

When the first spouse dies, any unused exemption can be preserved for the surviving spouse by filing a federal estate tax return (Form 706) even when no tax is owed. Miss that filing and you can lose millions of dollars of shelter. If you are married, an estate attorney should be running the numbers before either spouse passes.

The 2026 cliff

Under current law the elevated exemption is scheduled to sunset at the end of 2025 and roughly cut in half. Congress could extend, tweak, or repeal that sunset. If your net worth is in the $6 million to $14 million range for singles or $12 million to $28 million range for couples, this is a very live planning question. Some families are accelerating gifts to lock in the higher amount.

State estate and inheritance taxes

About a dozen states levy their own estate or inheritance tax, and several have exemptions well below the federal figure. Massachusetts, Oregon, Washington, Minnesota, and New York are common examples. State residency at death can matter as much as federal law.

This calculator is a starting point. If your numbers even get close to the exemption, work with an estate attorney and a tax professional; a good plan can move real dollars.