Estate Tax Calculator

The federal estate tax is a tax on the transfer of wealth from a deceased person's estate to their heirs. It applies only to the portion of an estate that exceeds the federal exemption threshold — $13,610,000 per individual for 2024. Estates valued below this exemption owe no federal estate tax at all, which means the vast majority of American families will never encounter it.

The tax is levied on the taxable estate, which is the gross estate minus allowable deductions. The gross estate includes virtually all property you own or have an interest in at the time of death: real estate, bank accounts, investments, business interests, life insurance proceeds payable to your estate, and retirement account balances (IRAs, 401(k)s). Importantly, life insurance and retirement assets that many families overlook can push an estate over the exemption threshold.

Deductions reduce the gross estate to arrive at the taxable estate. Allowable deductions include outstanding mortgages and debts, funeral expenses, estate administration costs, qualifying charitable bequests, and — crucially — unlimited transfers to a surviving U.S. citizen spouse (the unlimited marital deduction). A thoughtful estate plan leverages these deductions to minimize liability.

The 2024 federal estate tax rate is a flat 40% on all taxable amounts above the exemption. While the tax code once featured a graduated rate table, for practical planning purposes the marginal rate on amounts exceeding the exemption is 40%. This calculator applies that flat 40% rate to the federal taxable amount, consistent with the simplified approach used for most planning estimates.

The federal exemption is unified with the lifetime gift tax exemption, meaning large taxable gifts made during your lifetime reduce the exemption available to your estate. This calculator accounts for prior taxable gifts, reducing your available exemption accordingly.

Understanding the step-by-step calculation helps you identify exactly where planning opportunities exist. The estate tax calculation moves through several distinct stages, each of which can be influenced by smart estate planning decisions.

Step 1 — Gross Estate: Add together your total estate value (real property, investments, bank accounts, business interests), life insurance proceeds, and retirement account balances. These three categories form the gross estate.

Step 2 — Total Deductions: Sum all allowable deductions: mortgages, other debts, funeral expenses, administrative expenses, charitable bequests, and spousal bequests. The marital deduction for transfers to a surviving citizen spouse is unlimited — it can reduce the taxable estate to zero for a married couple.

Step 3 — Net (Taxable) Estate: Subtract total deductions from the gross estate. This is the amount actually subject to potential tax.

Step 4 — Available Exemption: Start with the 2024 federal exemption of $13,610,000 and subtract any prior taxable gifts you made during your lifetime. The remaining figure is your available exemption.

Step 5 — Federal Taxable Amount: Subtract your available exemption from the net estate. If the result is zero or negative, you owe no federal estate tax.

Step 6 — Federal Tax: Multiply the federal taxable amount by 40% to get the federal estate tax owed.

Step 7 — State Estate Tax: Many states impose a separate estate tax with lower exemptions and rates. Enter your state's exemption and rate to estimate state-level liability. The state tax is calculated on the net estate minus the state exemption, at the state's flat rate.

Step 8 — Total Tax and Net to Heirs: Add federal and state taxes for total liability, then subtract from the net estate to find what heirs actually receive.

The 2024 federal estate tax exemption of $13,610,000 per individual (adjusted for inflation) is historically high. A married couple can effectively shield up to $27,220,000 from federal estate tax through proper use of portability — a provision that allows a surviving spouse to use the deceased spouse's unused exemption.

However, estate planning professionals and high-net-worth families are paying close attention to the scheduled sunset of the Tax Cuts and Jobs Act (TCJA). The elevated exemption amounts introduced by the TCJA are set to revert to pre-2018 levels (roughly $5–7 million, inflation-adjusted) after December 31, 2025, unless Congress acts to extend them. This potential reduction makes 2024 and 2025 critical planning years for estates in the $7–14 million range.

Strategies to take advantage of the current high exemption before any potential sunset include irrevocable trusts (such as Spousal Lifetime Access Trusts or SLATs), accelerated gifting, and intra-family loans. The IRS has confirmed that gifts made under the current exemption will not be "clawed back" if the exemption later decreases.

For estates that clearly exceed the exemption even under the current law, planning tools like Grantor Retained Annuity Trusts (GRATs), Qualified Personal Residence Trusts (QPRTs), Family Limited Partnerships (FLPs), and life insurance in an Irrevocable Life Insurance Trust (ILIT) remain powerful strategies to reduce the taxable estate.

Always consult a qualified estate planning attorney and CPA when making decisions based on estate tax projections. Tax law changes frequently, and this calculator uses 2024 figures as a planning baseline.

While the federal estate tax has a high exemption threshold, seventeen states and the District of Columbia impose their own separate estate or inheritance taxes — often with much lower exemptions and without portability between spouses. If you live in or own significant property in one of these states, your estate planning must address both layers of taxation.

State estate tax exemptions vary widely. Massachusetts and Oregon set their exemptions at just $1,000,000. Washington state allows up to $2,193,000 (2024). Some states, like Maryland, impose both an estate tax and an inheritance tax. State estate tax rates typically range from 10% to 20% and are often progressive.

This calculator allows you to enter any state exemption amount and a flat state tax rate to model your combined federal-plus-state liability. Because state rate structures vary (some are graduated, some flat), enter an effective blended rate for the most accurate estimate if your state uses progressive brackets.

Moving to a no-estate-tax state like Florida, Texas, or Nevada is a strategy some high-net-worth individuals consider, but it must be executed carefully — states scrutinize domicile claims and look at where you spend time, maintain a home, vote, and hold a driver's license.

An estate tax bill is not inevitable — proactive planning can dramatically reduce or even eliminate the tax. Understanding the key strategies helps you have more informed conversations with your estate planning team and set realistic goals for what this calculator's estimates mean for your family.

Annual Gift Tax Exclusion: In 2024, you can give up to $18,000 per recipient per year ($36,000 for a married couple) without using any of your lifetime exemption. Over decades, systematic annual gifting can remove substantial wealth from your estate tax-free. For a couple with four children, that is $144,000 per year shifted out of the estate.

Irrevocable Life Insurance Trust (ILIT): Life insurance proceeds are included in your gross estate if you own the policy. An ILIT owns the policy instead, keeping the death benefit outside your taxable estate entirely. The trust can use the proceeds to provide liquidity to pay estate taxes without the proceeds themselves being taxed.

Charitable Remainder Trusts (CRTs) and Donor-Advised Funds: Charitable bequests reduce the taxable estate dollar-for-dollar. Structured giving through CRTs can provide income during your lifetime while simultaneously reducing your estate.

Spousal Portability and Bypass Trusts: A surviving spouse can elect to use the deceased spouse's unused exemption (portability), effectively doubling the exemption for a married couple. However, this requires filing a timely estate tax return even if no tax is due. Bypass trusts (also called Credit Shelter Trusts) can preserve the exemption and keep appreciation out of the surviving spouse's estate.

Valuation Discounts: Interests in closely held businesses and family limited partnerships may qualify for discounts of 20–40% for lack of marketability or minority interest, reducing the reported value of those assets in the estate.

Use this estate tax calculator to model various scenarios — for example, what happens if you shift $2 million into an ILIT, or increase charitable bequests — to see the direct impact on your projected tax bill.